24 September 2021
We have advised leading data-driven underwriting and risk analytics business Envelop Risk on its Series B financing of $130 million led by SoftBank Vision Fund 2. The investment is intended to support the business in expanding its proprietary machine-learning and data-driven underwriting activity in London and Bermuda, with hopes to accelerate growth into new markets globally and beyond cyber (re)insurance.
Founded in 2016 with a vision of transforming how the insurance industry quantifies and manages risk, Envelop Risk underwrites bespoke reinsurance for global insurance firms, differentiating its products through the application of advanced cyber analytics, enabling customers to manage their portfolios with greater precision. In less than five years Envelop Risk has become an established force in cyber reinsurance, having written over $250 million of business since 2018 while comfortably surpassing industry benchmarks for performance.
Envelop Risk plans to use the investment to expand operations in cyber reinsurance and cyber technology partnerships, while continuing to invest heavily in predictive analytics for assessing the likely economic consequences of cyber risks to commercial entities. The raise will also allow the company to establish a hybrid balance sheet model; enabling the firm to deploy its own risk capital in alignment with existing partners.
Commenting on the transaction, corporate partner Ross McNaughton said: "As cyber security threats become increasingly prevalent, cyber insurance has never been more crucial to businesses across all industries. Envelop Risk is leading the way in providing proprietary (re)insurance underwriting, driven by its impressive modelling capability. We were pleased to work with the team to achieve this milestone fundraise and look forward to seeing the impact the business continues to have on the cyber risk market."
Jonathan Spry, CEO of Envelop Risk added: "We are delighted to have secured this significant investment which will strengthen our leadership in data-driven cyber (re)insurance underwriting and bring transformational prospects for our business in terms of reach and activity. We are extremely grateful to Ross and the team at Taylor Wessing for their valuable assistance in getting this deal secured."
Graeme Bell, General Counsel and Director of Envelop Risk, continued: "This raise will take us to the next level and we look forward to continuing to rise to the challenge of cyber risk as an ecosystem. It was great working with the Taylor Wessing team whose first class knowledge of the venture and growth market was readily apparent and ensured we received invaluable support and commercially focused guidance throughout."
The team was led by corporate partner Ross McNaughton with support from corporate senior associate, Alex Dodds, and associate, Loye Oyedotun. Additional support was provided by partner, Ann Casey, and senior associate, Karen Bail, on incentives. The transaction is expected to complete in October 2021, subject to shareholder approval.