Reimagining Insurance for Brazil’s SME Businesses
By James Green
Comprised of a fragmented ecosystem of legacy businesses where none of the top players truly dominates, insurance for small and medium size businesses in LatAm is hard to get and even harder to understand. Large traditional carriers, like much of the financial system, are stuck in the past making financial access hard for even the most well funded companies.
Traditional insurance carriers in LatAm are battling today’s risks with antiquated tools. Not only does this limit the market’s growth, it also makes it extremely tough for smaller companies to get insurance. While one could create software to enable these carriers, we at CRV believe you can create long term alpha by having a fully integrated provider of insurance utilizing the best of modern day technology.
That is why we are so excited about today’s $6.7 million pre-seed funding round — the largest in Latin American history — for Latú (Latin American Tech Underwriters). CRV co-led the round with leading Brazilian VC firm Monashees. Latú is poised to radically change the way business insurance works by pulling innovation into the industry.
When I first met Latú founder and CEO Paola Neira, I was quickly drawn to her concept of an insuretech focused on providing coverage for SMEs in Brazil along with her ability to articulate a vision for both near and long term growth. Having spent several years at Rappi as director of product development, her experience and network are world class. Over the past several years Rappi has produced a number of new hyper growth companies and we believe that Latú has the potential to be the next of these.
Her work at Rappi, and her reputation from her time there have allowed her to pull together an incredible founding team all impassioned by this problem statement. This experience allows her to attract senior talent with experience at companies such as Rappi, Stone and Porto Seguro as well as high profile customers that believe in the early stage development of a young company. It’s worth noting that all of Rappi’s co-founders are investors in the pre-seed round, a true testament to Paola’s contributions there and her vision for Latú.
Ironically, while it is much harder for SMEs to secure insurance, it is quite literally the key to unlocking growth enabling them to do business with large corporations, secure funding, open a new vertical and so much more. We, at CRV, believe that foundational companies are created by empowering specific demographics and we are deeply excited by the idea that Paola can do that by giving access to insurance for the businesses of LatAm.
With Latú, businesses can get coverage of up to $10 million against lawsuits, cyberattacks, down time, property damage, errors in profession and compliance gaps, among others in just a couple minutes.
Latú’s journey reminds me of that of many LatAm unicorns addressing the pain of financial legacy institutions. Companies like NuBank, DLocal, Jeeves and many others are helping empower personas throughout LatAm and in turn creating modern foundational companies. We believe that Latú can have a similar impact on the insurance category, starting with Brazil.
Our team gets really excited about working with very early stage companies (we invested in DoorDash when it was only nine weeks old) across a variety of industries. And, having been around for 52 years, we also know a thing or two about fundraising in all kinds of market conditions and have the experience and track record of guiding our founders successfully. If you are a founder looking to create a foundational company, reach out, we want to hear from you.