Sprout.ai, an insurtech startup formerly known as BlockClaim, has raised $2.5m in a second seed funding round in order to accelerate the rollout of its automated rapid insurance claims settlement platform.
The funding comes amid an anticipated surge in demand for automation in response to the coronavirus, which the startup believes it can leverage.
The funding round was led by Amadeus Capital Partners, with additional funding by Playfair Capital and Techstars. It follows previous seed and pre-seed funding rounds, which together raised £750,000 for Sprout.ai.
Sprout.ai’s offering centres on its Contextual AI system, which allows insurance claims to be settled within 24 hours. This uses natural language processing and optical character recognition to leverage the unstructured data that accompanies insurance claims, pairing it with real-time information from public and web-based sources to process the claim.
The latest funding round will enable Sprout.ai to take on new hires in its data science and engineering team, with the company targeting “world-class” talent, as well as expanding its sales efforts and initiating a rollout in the US.
“Sprout.ai is shaping the future of the burgeoning insurtech sector and with this new investment, we can lead further innovation in claims and fraud management,” said Niels Thoné, CEO of Sprout.ai.
“The name change is the first of many steps Sprout.ai will take as it continues to grow its client base across multiple continents.”
Growing automation demand amid coronavirus fuels Sprout.ai funding success
Founded in 2018, Sprout.ai is thought to be in a strong position at present, as companies across industry verticals are seeking to improve efficiency and lower costs amid the coronavirus pandemic and ahead of an expected recession.
The insurance industry in particular has seen significant upheaval as a result of Covid-19, with some sectors such as travel halting the sale of new products, while others are forced to make significant policy changes or waive deductibles.
As a result, many insurance companies are likely to take a financial hit this year, making products that help with cost-cutting particularly valuable.
“Now more than ever, insurers will be looking at operational savings and efficiency gains,” said Amelia Armour, principal at Amadeus Capital Partners.
“They are likely to face an unprecedented raft of claims due to the pandemic while simultaneously managing distributed workforces. Sprout.ai can help insurers meet the challenges they face, working in tandem with their existing IT infrastructure.”