These days, we’re constantly hearing of another company that’s been breached by hackers. Target. Marriott. Equifax. These are just a handful of the many companies that have recently been attacked and compromised by hackers. Hundreds of millions of peoples’ private records were leaked and the breached companies have each faced liabilities and lawsuits.
The traditional security approach has been to build bigger walls. Stronger firewalls. AI-powered endpoint protection. Real-time breach detection. But, while today’s security tools are getting much smarter and more powerful, they only do their job most of the time. And, when the tools or security processes fail us, our data is exposed and companies face liability.
When your house is broken into, your home insurance covers most of the losses. When you get into a car accident, your car insurance kicks in. And, in recent years, when companies are hacked or breached, their cyber insurance covers some of the liability.
However, as I dug into the large, rapidly growing cyber insurance industry, I discovered that not all cyber-insurers are created equally. While a small handful have access to state-of-the-art technology and data science, I was surprised to learn that a large majority of the industry is largely flying blind. Insurance brokers gather information by asking customers to manually fill in thick, dense forms. Many insurers lack deep and detailed historical data to provide meaningful input into their sophisticated underwriting models. And most of the industry’s processes are not yet digital, which leads to time consuming processes.
Today, we are excited to announce our Series A and Series B investments in Arceo, which is building the modern, digital platform for the cyber insurance industry.
The founders, Vishaal Hariprasad (V8) and Raj Shah have deep security expertise, going back to their days in the US military (shhhh… they can’t talk about it!) and then their last company, Morta Security, which they sold to Palo Alto Networks. V8 and Raj have assembled a uniquely cross-functional team of security experts, data scientists and insurance veterans to build a modern platform for the insurance industry.
Arceo is developing a complete cyber insurance solution which connects cyber security expertise, credible risk assessment, and vast risk pricing and underwriting experience that makes the entire cyber insurance process more efficient and, most importantly, relevant for helping insureds mitigate security threats. Thus, with Arceo, insurers can rapidly gather large amounts of granular security data, effectively price risk and underwrite their cyber-insurance products digitally.
It takes an ambitious and innovative founding team to recognize an opportunity to transform a market. And the Arceo founders are building a platform to transform the cyber insurance industry to help companies further mitigate their exposure to hackers and security breaches. At Lightspeed, we are excited to partner with V8 and Raj in their journey to combine data science, security expertise and insurance know-how into a comprehensive platform for the modern cyber insurer.
Arif Janmohamed is a Partner at Lightspeed Venture Partners. He focuses on investments in enterprise IT and SaaS and sits on the boards of a number of rapidly scaling companies, including Netskope, TripActions, Appzen, Moveworks, and Arceo. In his free time, Arif plays ice hockey with his wife, who yells at him for never passing the puck to her.
Lightspeed is a multi-stage VC firm focused on accelerating disruptive innovations and trends in the enterprise and consumer sectors. Lightspeed has backed 350+ companies globally in the past two decades including Nutanix, AppDynamics, MuleSoft, Snap and Nest.