InsurTech startup Obie raised a $10.7m Series A round led by Battery Ventures while also launching its new insurance product offering, which focuses on landlords and investment property owners.
Thomvest Ventures, Funders Club, MetaProp and Second Century Ventures also participated in the funding round. In addition, Battery Ventures’ general partner Michael Brown joined Obie’s board of directors.
Chicago-based Obie — which went through the Y Combinator programme — offers instant quotes in less than five minutes and claims to save policyholders up to 25-30% compared to other insurance premiums.
Obie extracts key data points from client responses, which its technology then checks with dozens of public and privately available data points to eliminate the constant back-and-forth that normally occurs between a real estate investor and an insurance agent. It then analyses over 50 underwriting data points, which include things like the proximity of the landlord to the property, as this is often a great indicator of proactive and preventative maintenance as well as attentiveness to tenant issues or properties in hurricane zones.
Once Obie runs its analysis, the platform uses a proprietary algorithm to match an application to carriers based on the risk-appetite profiles that carriers have at any given point in time. The platform then provides the landlords and property owners with a quote. If approved, landlords can be immediately underwritten.
Obie’s cloud-based insurance and portfolio management platform targets the 11 million small and medium-sized apartment landlords. Obie co-founders Aaron and Ryan Letzeiser have leveraged their respective backgrounds in insurance and real estate private equity to build the Obie platform. They are operating under the premise that despite being the largest class of real estate investors in the US, this group of landlords “is significantly underserved.”
This particular portion of landlords are too small for larger brokerage houses, while the smaller, independent insurance agencies are generalists with only limited carrier partners that specialize in this type of risk. As a result, landlords get bad pricing and limited coverage, after enduring a lengthy and antiquated application process, the firm said in a statement.
Commenting on the round, Aaron said, “The impact of insurance premiums on real estate investors’ bottom line and the overall value of the asset is significant, yet the process of securing proper coverage has always been a bit of a black hole. Obie changes this. We built technology that makes securing insurance the least of a landlord’s worries. Now purchasing insurance is quick, easy, and extremely cost-efficient, and with Battery’s support we can scale even faster to meet the needs of this growing market.”
Building on the firm’s key goals, Ryan said, “We saw chronic problems throughout the real estate insurance market so we’re reinventing the process from the bottom up. We are starting at the intersection of insurance and technology which allows us to address the insurance needs of independent investors and landlords that have largely been ignored by insurance carriers.”
Over the past year, Obie has secured insurance for over $3bn worth of property. Obie saw its premiums climb to about $1m in its first 12 months of being in business. Over the last 12 months, that number has climbed to about $10m. To continue expanding its footprint, Obie also acquired competitor Skylight Insurance last year.
Commenting on the importance of insurance tools for landlords, Brown said, “The number of small, hobbyist landlords and property investors is growing at an impressive rate, yet nothing exists in this space to provide them with the quality insurance coverage they need to safeguard their investments.
“When we saw what the Obie team had built, we were immediately struck by how their technology didn’t just slap a band-aid on traditional approaches to insurance coverage; it brings intelligence and simplicity to the process to match each policy application to the ideal carrier for respective risk factors. This results in a win for all parties.”
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