The insurance industry, sleepy and ancient, is ripe for disruption. We've seen companies like Lemonade, Hippo and Rhino get in on that opportunity. Today, an insurtech company focused on small business insurance has raised $18 million to keep growing.
Meet Huckleberry, whose Series A was led by Tribe Capital, with participation from Amaranthine, Crosslink Capital and Uncork Capital.
Huckleberry launched in 2017 to offer business insurance, including workers' compensation and general liability, all through an online portal.
Small business insurance coverage is not like car insurance or renters insurance. It's not as simple as filling out a few forms and getting a quote. Even if a few platforms do have algorithms for providing quotes, you can't really close the deal unless you get on the phone.
It's an incredibly tedious and stressful process. In fact, Huckleberry co-founders Bryan O'Connell and Steve Au first came up with the idea for Huckleberry when they were seeking out their own small business coverage for a previous startup idea.
The industry itself is incredibly fragmented, which is caused in part by the fact that small business coverage underwriting varies wildly from business to business. For example, the policy for three or four restaurants might look relatively similar. However, a fast food restaurant might be identified as a higher risk with regards to workers' compensation than a Michelin-star restaurant, where workers might be more eager to get back to work and take home their tip money. These differences come in the form of location, operations and many other factors, as well as business vertical.
Huckleberry has worked to build out myriad coverage verticals, including food and beverage, fitness, retail, legal, healthcare, hair and beauty and more.
The firm offers worker's comp, as well as a package policy that includes general liability, property and business interruption insurance. Customers also can purchase add-ons like hired and non-owned auto insurance, employment practices liability insurance (EPLI), liquor liability insurance, employee dishonesty coverage, professional liability insurance, equipment breakdown coverage and spoilage coverage.
Huckleberry isn't itself an insurance carrier, but does have the authority to underwrite and sell policies on behalf of the carrier. That said, Huckleberry's expansion both by vertical and geography is more difficult than your average software startup. The regulatory landscape of insurance in the U.S. goes state by state.
"Our biggest challenge is navigating 50 states' worth of extremely complicated regulations on something that is much more complicated than a software product," said O'Connell. "We're trying to protect individual workers and businesses all while staying fully compliant in every market."