MS&AD Ventures invests in insurance risk platform Vesttoo
Vesttoo, an alternative reinsurance and investment platform, has raised $15 million in a Series B funding round led by Mouro Capital, which is backed by a large multinational bank, and MS&AD Ventures, the corporate venture capital fund of Japan-based MS&AD Insurance Group Holdings, which also owns MS Amlin.
The Series B round, which comes just three months after Hanaco Ventures led the company's Series A round, will drive expansion of Vesttoo's Insurance-Linked Program (ILP) offering, a security-based investment portfolio, as well as the world's first fully digital marketplace for insurance-based risk transfer and investments. Both are integral to Vesttoo's business strategy, aimed at bridging the funding gap in the reinsurance market.
Vesttoo's ILP investment portfolio is focused on fully collateralized Life and P&C reinsurance transactions. Through the ILP programme, investors can pledge existing securities as collateral in these transactions, earning additional spreads over current yields (long-term, structured alpha), without increasing their risk profile.
Furthermore, Vesttoo's marketplace, a first of its kind in the market, provides insurers with access to capital market originated capacity. Investors, on the other hand, benefit from direct access to a new asset class comprised of low volatility insurance risks and attractive risk reward.
Mouro Capital, which is backed by a leading multinational bank, is focused on investing in the future of financial services. Mouro Capital manages $400 million in assets and has invested in companies such as iZettle (acquired by PayPal), Kabbage (acquired by American Express), Creditas, Curve, Ripple, Tradeshift, Trulioo and Upgrade.
"Mouro Capital and MS&AD see the same opportunity we see: Vesttoo's marketplace as a global deal pipeline that drives capacity directly from the capital markets to insurers, while delivering exceptional return on risk to investors by opening up this new asset class," said Yaniv Bertele (pictured), CEO of Vesttoo. "Their partnership is an amazing vote of confidence in us and is a signal to financial and insurance institutions that we are significantly increasing business capacity. Together, we are going to scale our ILP and fully digital marketplace."
Jon Soberg, Managing Partner at MS&AD Ventures, said: "Our team at MS&AD Ventures is really excited about the tech-driven approach to risk transfer that Vesttoo is applying to the reinsurance market. We believe this is the future and we see huge opportunities as risks such as climate and cyber become bigger and more complex. Vesttoo has a great team and we are excited to be part of the journey with them."
Chris Gottschalk, General Partner at Mouro Capital, added: "We are excited to partner with Vesttoo as they continue to innovate and bring new products, such as the ILP, to market for both insurers and the capital markets. We have been impressed with team's ability to leverage technology to build a truly differentiated marketplace."
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