Layr, part of the insurance technology or insurtech companies segment, helps independent, private insurance agencies and brokers automate and digitize property, liability and casualty insurance for small businesses. Layr does not offer employee benefits insurance or personal lines such as homeowners or car insurance.
This investment round was led by San Francisco-based Cota Capital, with participation from K Fund, HSCM Ventures, Sandbox Industries and Flyover Capital. The Layrs platform is tailored to the needs of each company using its product, which is called white-labeling.
We aspire to be the largest small commercial insurance company that no small business owner has ever heard of because they think they just work with their broker, but in reality they use our platform which is white labeled for their broker, Phillip Naples. founder and CEO of Layr, told The Atlanta Journal-Constitution.
The Marietta native founded Layr in 2016 after more than two decades as an insurance broker. His goal is to modernize an industry that he says still operates as it did when it was founded 300 years ago.
“It’s a lot of manual processes, a bunch of paper, a lot of data stored in PDF files or, in many cases, in filing cabinets,” he said.
Layr is working to streamline the process for brokers and their policyholders through its software platform. According to Naples, the company currently has customers in all 50 states.
In early 2022, Layr closed a $10 million financing round that the company promoted as a Series A, but Naples said it was more like an extension of its initial seed funding. This latest investment, Naples said, is more like a true Series A capital raise that companies typically seek after establishing their business model and customer base.
Since 2016, Layr has raised a total of $25 million but has not attracted any investments from Atlanta companies.
Overall, venture capital investment in North America has stagnated this year after falling sharply in 2022 from a peak in late 2021, according to Crunchbase.
It took Naples about six months to raise its latest round of financing. He said that compared to previous increases, this time investors wanted more information upfront before signing any deal.
I believe that VC from limited partnerships has come under more scrutiny. And given that valuations have been steadily declining over the past few years, a lot more work is needed up front to make sure they make the right investment early rather than trying to fix it after the fundraising, he said.
For Layra, he said, being in Atlanta provided access to a lot of technical talent as Naples built the business. Many large insurance companies, such as State Farm and Liberty Mutual, also have large dealerships in the metropolitan area. Naples said the presence of these companies in the area meant there was a lot of knowledge and advice about the industry available.
Naples plans to use the latest funding to expand its company’s sales and marketing team, as well as further develop its platform.
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