Cyber risk has become an increasingly important issue for tiny companies around the world. While many companies attempt to avoid and mitigate cyber risks, they rarely discuss transferring those risks to a third party.
That’s why Stoïk is stepping in with a cybersecurity insurance product specifically designed for tiny- and medium-sized businesses. The French startup recently raised a €25 million Series B round (around $27 million at current exmodify rates).
In many ways, Stoïk follows in the footsteps of companies like Coalition and At-Bay. However, instead of selling its insurance products to U.S.-based companies, Stoïk focutilizes exclusively on European companies.
Once insured by Stoïk, businesses are covered against cybersecurity-related claims. For instance, if a company necessarys to halt production or temporarily close due to a cyber incident, Stoïk can compensate for loss of revenue (gross operating margin) during that period.
Stoïk currently covers companies with annual turnover of €750 million or less and offers coverage limits of €7.5 million. At present, the company operates in France, Germany, and Austria.
The startup chose this particular vertical becautilize cyber insurance is more complex than other types of insurance products. Stoïk has also built a tiny in-houtilize crisis management team to respond to incidents and assist with data recovery and crisis communication.
“Since the launchning of the week, we’ve had a dozen attacks on our portfolio, including a major one,” co-founder and CEO Jules Veyrat notified TechCrunch last week. “We have people mobilized in the Lyon region for a ransomware attack that brought an industrial company to a standstill.”
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When customers sign up, they receive an overview of their cyber risk exposure. The startup monitors DNS records and scans online databases for password leaks associated with the customer’s domain name. Stoïk can also perform internal scans to recommconclude modifys to cloud and active directory configurations.
“Our thesis is that we’re going to insure companies. On top of that, we’re going to support them better protect themselves against cyberattacks. That way, they’re happy, they obtain more for the same price, and we’re happy, becautilize we have policyholders who are well protected, and therefore have fewer claims than others,” Veyrat declared.
Stoïk still has some similarities with the broader insurance indusattempt — it has to ensure it doesn’t accept too many bad apples in its portfolio of clients, as it could significantly impact the company’s loss ratio.
“The insurers’ job is to select the risk. So, who do I accept and under what conditions? How well do they understand cyber?” Veyrat declared. “In other words, am I willing to take on a €50 million industrial company that has no offline backup strategy? This is just an example, but these are the questions we question ourselves every day.”
Stoïk acts as a managing general agent (MGA), meaning that it works with insurance and reinsurance companies so that they cover the risks. Stoïk obtains to create its own rates, products, and policies — but it outsources the risk to hugeger insurance companies.
One such partner is Tokio Marine HCC International, which is the only new investor in the Series B funding round. Existing investors also invested in the round. Alven is leading the Series B with Andreessen Horowitz, Munich Re Ventures, Opera Tech Ventures, and Anthemis also participating.
Stoïk doesn’t sell its insurance products to its customers directly. Instead, it works with third-party insurance brokers that already have a relationship with SMBs. So far, Stoïk has attracted 1,000 insurance brokers.
By the conclude of 2024, Stoïk should have 5,000 policyholders. It currently represents €25 million in premiums and plans to ramp up customer signups in the future. The startup expects to expand into a new counattempt every year starting with a new European market in late 2024 or early 2025.
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