Huckleberry raises $18 million to use artificial intelligence to pair small companies with insurance policies.

According to polls, small companies are largely unprepared for unexpected disasters. Three-fourths of U.S.-based businesses claim they don't have an insurance package that covers their specific needs, and 40% say they don't have any policies at all. Of which, the two was liable for business lawsuits, contract conflicts, and staff accidents, in addition to burglary or robbery and consumer damage — both of which will lead to hundreds of millions of dollars in repairs and remedial expenditures.

That is why, in 2017, Bryan O'Connell, a former McKinsey market analyst and Morgan Stanley partner, created Huckleberry, a carrier focused on a scalable cloud-based software and data science and analytics backend. The San Francisco-based corporation aspires to digitize the buying and administration of commercial insurance, a form of policy that is notoriously difficult to obtain and has traditionally been mired in layers of red tape. So far, it has seen some success, with investments from Great Oaks Venture Capital, Promus Ventures, and others.

Approximately two years later, the company revealed today that it has secured $18 million in series A funding led by Tribe Capital, with additional contributions from Amaranthine, Crosslink Capital, and Uncork Capital. It follows a $4 million seed round in March 2018, bringing the company's overall funding to more than $20 million. According to O'Connell, the investment would help Huckleberry expand its activities (including infrastructure, data science, and marketing) as well as its insurance services in personal care, auto repair, restaurants, and other verticals.

Huckleberry does not charge a broker fee and combines data from public and proprietary databases (such as licenses, health code violations, and crime data) to increase the total appraisal performance of applicant firms. The contracts and claims are provided by Markel Insurance Company, an insurer headquartered in Glen Allen, Virginia. (Huckleberry emphasizes that it only supplies underwriters with publicly accessible information and that any leftover company data is automatically removed from its servers.) During the preliminary stages, a conversational AI-based chat bot replaces an agent, and machine learning algorithms expedite and validate the underwriting process at each point.

According to O'Connell, most companies get a quote and coverage from Huckleberry in five minutes or less. Clients may choose from a variety of worker's compensation packages as well as plans that include general liability, land, and business interruption benefits. They can also sign up for employed and non-owned car insurance, work activities liability insurance (EPLI), liquor liability insurance, employee dishonesty coverage, occupational liability insurance, vehicle loss coverage, and spoilage coverage if they want to.

“Huckleberry was born as a result of the agonizing experience I went through while buying business insurance at a previous startup,” said O'Connell. “Having worked with an insurance carrier, I realized it was possible to create a website that avoids time-consuming offline paperwork and prioritizes the small business owner.”

The insurance technology industry is booming. Next Insurance, an online marketplace that serves small business owners with an emphasis on narrow niches (such as landscaper insurance and personal trainer insurance), raised $250 million last year. Pie Insurance, headquartered in Washington, D.C., received $45 million in March, a month after CoverHound received $58 million. Embroker, a business insurance provider, successfully received $28 million for the policy-matching web network.

The global insurance industry is forecast to hit $1.11 billion by 2023, driven by expansion of verticals such as health, property, casualty, and life insurance. About $1 billion has been spent in commercial insurance startups since 2015, according to a new XL Innovate report of CB Insights results, and FinTech Global reports that deals totaled $2.5 billion in the first three quarters of 2018 — an 89.8 percent growth year over year.