CoverForce Raises $13M to Modernize Commercial Insurance
The commercial insurance sector, a nearly $1 trillion industry, is often bogged down by inefficient processes involving outdated paper systems and PDFs. This creates significant friction between insurance carriers and distributors. Despite a desire for innovation among industry professionals, technological limitations have hindered progress, particularly in the quoting and binding process.
CoverForce aims to solve these challenges by connecting carriers and agencies through a marketplace for quote-and-bind API connections. The company’s technology enables seamless digital interactions between carriers, agencies, and wholesalers. This allows customers to instantly quote, pay, bind, and issue policies across numerous lines of business, including Workers’ Compensation, General Liability, Business Owner’s Policies, and Cyber insurance. By standardizing data flows and facilitating real-time connectivity with major carriers, CoverForce has drastically reduced integration times from months to weeks. This has saved partner companies millions in research and development costs, while also empowering over 9,600 producers nationwide to work faster and more efficiently.
AlleyWatch spoke with Cyrus Karai, CEO and Co-founder of CoverForce, to discuss the business, future plans, and the recent $13M Series A round.
AlleyWatch: Who were your investors, and how much did you raise?
Cyrus Karai: We just closed a $13M Series A, led by Insight Partners, with participation from Nyca Partners, Gaingels, and Sidekick. This is a major milestone and sets the foundation for our next growth phase.
AlleyWatch: Tell us about CoverForce’s product or service.
Cyrus Karai: CoverForce provides an infrastructure platform designed for the commercial insurance market. We offer the leading API marketplace for commercial lines and build custom development UI solutions for our enterprise customers. These support multiple lines of business, including Business Owner’s Policies, General Liability, Cyber, and Workers’ Compensation. Our platform accelerates the quoting and binding process, making it faster and more efficient for agencies, wholesalers, and carriers.
AlleyWatch: What was the inspiration behind the creation of CoverForce?
Cyrus Karai: I’ve always been driven to solve complex problems, and insurance presents an enormous opportunity. The industry is full of intelligent, forward-thinking individuals eager for innovation, but legacy systems have held them back. Witnessing their excitement when discussing a more seamless, digital future inspired me to help build that future with CoverForce.
AlleyWatch: How does CoverForce differentiate itself?
Cyrus Karai: Our primary differentiator is that CoverForce is fully integrated with carrier APIs. This ensures that when agents use our platform, whether through the UI or API, they receive bindable quotes, not just indicative ones. This creates a seamless, end-to-end experience where policies can be quoted, issued, and bound in one place without unnecessary complications. In addition, we work with carriers and MGAs to develop their API capabilities to boost speed and efficiency.
AlleyWatch: What is CoverForce’s target market, and how large iis it?
Cyrus Karai: We operate in the property and casualty (P&C) insurance market, which is massive—over $960 billion in annual premiums written. There’s a significant opportunity to modernize how insurance is distributed and purchased.
AlleyWatch: What is your business model?
Cyrus Karai: Our business model is simple: we assist carriers and MGAs digitize their distribution processes by enabling instant quote-and-bind experiences for their partners, including agencies, brokers, and other distribution channels. We also build enterprise-grade solutions to match the unique workflows of large-scale carriers and MGAs, assisting them in scaling faster and more efficiently.
AlleyWatch: How has the business evolved since we last spoke in the Fall of 2023, following CoverForce’s seed round?
Cyrus Karai: Since our Seed round, we’ve focused intently on developing the core API engine to standardize quoting and binding processes across various carriers. Progress has been remarkable – our platform now supports integrations with over 15 major carriers, alongside significant expansion of our partnerships with agencies and wholesalers.
AlleyWatch: What was the funding process like?
Cyrus Karai: It moved surprisingly quickly. Several investors monitored our progress, and our early advisors and seed investors facilitated our ability to stay focused on the right goals to make this round successful. Once we reached the milestones, we approached the firms we believed would be the best long-term partners. Insight Partners stood out immediately – they have a strong track record in infrastructure businesses, and their operating team is incredibly hands-on in supporting their portfolio companies. It felt like the perfect fit from day one.
AlleyWatch: What were the biggest challenges you faced when raising capital?
Cyrus Karai: My cofounders and I are deeply immersed in the insurance space. We understand the people, the challenges, and the opportunities. However, for many SaaS and FinTech investors, insurance is still a relatively unexplored field. Initially, there can be skepticism about the impact that startups can have in this area. But once they see how engaged our customers are and how much they depend on CoverForce, that skepticism swiftly turns into excitement.
AlleyWatch: What factors about your business led investors to fund your company?
Cyrus Karai: I believe it boils down to trust, execution, and value creation. We’ve built strong relationships with our customers, and they trust us to address their key pain points. Our team consistently executes at a high level, even on complicated projects. Also, the value we provide – both in terms of efficiency and revenue growth – is something our customers frequently highlight. Insight surveyed our customers and we received the highest possible NPS score, which truly reinforced our impact.
AlleyWatch: What are your goals for the next six months?
Cyrus Karai: We’re doubling down on engineering and integrations. Our main focus is expanding our carrier and MGA connections, improving our API capabilities, and accelerating customer onboarding. Essentially, we want to make it even easier for agencies and brokers to access instant, bindable quotes across multiple carriers.
AlleyWatch: What advice would you give to companies in New York without fresh capital?
Cyrus Karai: Be strict with your spending. At CoverForce, frugality is part of our DNA – we treat every dollar like it’s our own. Before we spend money on something, we always ask: Can we do this ourselves? Is this absolutely necessary? This approach has allowed us to reach our first seven figures in sales, with almost no marketing expenses. This forces you to focus on what truly drives results.
AlleyWatch: Where do you see the company in the near term?
Cyrus Karai: Our priority is strengthening our partnerships with enterprise customers and helping them accelerate their digital transformation. This includes understanding their specific needs, refining our technology to match their workflows, and making it easier than ever for them to distribute and sell insurance efficiently.
AlleyWatch: What’s your favorite restaurant in the city?
Cyrus Karai: Without a doubt, Au Cheval in Tribeca. Their burger – with the thick-cut bacon – is pure happiness. Anytime a friend visits New York, Kaivan and I make sure to take them there.
