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Insurtech Investor Martha Notaras on Making a Good Living from (Sometimes) Boring Companies
The insurance business is having a moment as new technology and big data disrupt the space. Martha Notaras is placing her bets in fintech and insurtech companies.
Notaras is a managing partner at Brewer Lane and an investor in Lemonade, Ladder Life and similar companies that bring the insurance industry into the digital world. She joined this episode of the LA Venture podcast to talk about the future of insurance.
"Obviously, risk is a huge issue within insurance. And either you get it right or you don't, and it really has a lot to do with your ultimate profitability. And then there's infrastructure... some of it is incredibly boring. But you can make a really good living out of boring companies," said Notaras.
Her interest in insurance tech led her to Lemonade. She saw how the company embedded artificial intelligence into everything it does, speeding up the process for managing claims and saving customers and the business time and headaches.
"I think at one point, they had a world record for a three-second insurance claim, between the time that someone made the report and the money hit their bank," said Notaras.
Notaras' interest extends beyond home and auto and into cyber insurance as well. As ransomware attacks and hacks continue to make daily news, she sees a market for cybersecurity that impacts most startups. Notaras estimates that two-thirds of startups and SMEs still don't have adequate cyber insurance.
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Orca Security Ltd., an Israeli-based cloud security startup with U.S. headquarters in Los Angeles, has closed a $210 million Series C round and has plans to expand locally as it takes on competitors.
"This cash infusion makes Orca one of the world's fastest cybersecurity companies to reach unicorn status," said Shua, referring to privately held startups valued at over $1 billion. He said Orca plans to become a publicly traded company at some point. "We are not looking to get acquired."
Orca Security has assembled a who's who list of clients. It includes online stock trader Robinhood, New York-based insurer Lemonade, San Francisco-based data analytics firm Databricks and North Carolina-based digital bank Live Oak Bank.
It provides cloud security through its patent-pending "SideScanning" technology. The technology plugs up potential vulnerabilities from cyber threats and replaces them by combining everything into a single platform.
The round was led by Mountain View-based CapitalG, Google's independent growth fund and Menlo-based Redpoint Ventures, said co-founder and CEO Avi Shua, in an interview.
The company competes against cloud security heavyweights such as Qualys Inc., Rapid7 Inc. and Tenable Inc.
But their biggest rival is Santa Clara-based Palo Alto Networks Inc., which has been in a public spat with Orca. Shua said his company is not backing down.
Over the next year, Orca Security plans to "rapidly grow its headcount" in L.A. by hiring more marketing personnel and engineers, as well as beef up its research and development operation in Tel Aviv, Shua said. It also plans to form sales offices in the United Kingdom and Australia.
The company has plans to move into a brick-and-mortar spot in L.A. once pandemic restrictions are lifted.
"It is a prime location," Shua said. "The future for us is hybrid."
Other participants in this latest round include previous investors such as San Francisco-based ICONIQ Capital, Menlo Park-based GGV Capital and San Francisco-based SVCI, or Silicon Valley CISO Investments, an angel investing syndicate geared to chief information security officers.
Founded in December 2019, Orca Security raised $55 million in Series B funding three months ago, and $20 million in a Series A round in May – giving the technology company a market valuation of $1.2 billion, said Shua in the interview.
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