Cyber insurer Elpha raises $20m from Axis, State Farm, others

Cyber insurer Elpha Secure Technology has completed a $20m Series A funding round led by Canapi Ventures, a venture capital firm investing in early to growth-stage fintech companies.

The funding round also saw participation from Elpha’s existing investors including Axis Capital, State Farm Ventures and The Hartford STAG Ventures.

Insurance-linked securities manager Fermat Capital Management, and private equity firms Stone Point Ventures and EOS Venture Partners also participated.

Elpha Secure provides cyber protection solutions for small and midsize businesses. By combining cybersecurity with risk transfer, it hopes to help customers reduce their cybersecurity risk rather than focusing on limiting coverage or raising rates.

Customers can download a single software installation that improves cybersecurity by means of encrypted data backups, multi-factor authentication for remote desktop connections, software version control, and machine learning to detect anomalies and advise specific action.

The cyber insurance product is backed by Axis and Everest.

The $20m funding round is intended to help drive business growth across broker networks and evolve Elpha product features.

"As a specialist insurer and reinsurer with a leading cyber practice, we at Axis recognize the dynamism of the digital risk landscape and the importance of risk mitigation against this backdrop,” says Linda Ventresca, Head of Digital at Axis Capital. “Elpha Secure’s innovation in monitoring, reducing, and managing risk throughout the life of an insurance policy aims to improve an insured's risk profile, ultimately delivering better experiences and outcomes for all stakeholders."

“We are humbled by the great investors supporting Elpha Secure and we are thrilled to welcome Canapi as a new partner,” said Preetam Dutta, chief executive of Elpha Secure. “Digital threats are growing in variety, frequency, and intensity, so cyber insurance is becoming indispensable. Yet, smaller businesses are finding they don’t have adequate cyber infrastructure to qualify for insurance. Instead of challenging business owners to define and implement the required cybersecurity measures themselves, we provide these measures through our software as well as the insurance policy. We’re only just getting started, and we look forward to expanding our reach and serving even more businesses in need in the years to come.”

“Today’s small and midsized businesses are not only at a greater risk than ever of suffering a cyberattack, but they also face significant hurdles when it comes to acquiring cyber insurance policies,” said Jeffrey Reitman, partner at Canapi Ventures. “By embedding security controls directly into their policies, Elpha Secure removes the friction associated with acquiring a cyber insurance policy, while simultaneously controlling loss ratios for their carrier partners. In offering an unprecedented solution that newly combines both cyber protection software and insurance, Elpha Secure greatly reduces the cyber risks in the system for all. We’re so excited to be leading this Series A and look forward to helping fuel the company’s growth into the future.”