Layr, an Atlanta-based insurtech startup, has raised $5 million in a Seed round led by Sandbox Insurtech. New investors Flyover Capital and Maschmeyer Group Ventures, along with existing investor Lloyd’s of London joined the round.
Layr Co-Founder and CEO Phillip Naples said the funding will primarily be used to expand the company's AI and machine learning technology, but also for distribution and scaling the company.
“Data suggests that more than 60% of U.S.-based businesses will be owned by Gen Xers and Millennials in the next year. We’ve created an entirely new and automated process that meets the needs of modern business owners. This round of investment affirms that we’re solving a real problem and supporting economic growth by making business insurance more available, understandable, and affordable than ever before,” Naples said in a statement.
Co-Founder and serial entrepreneur Andrew Egenes said the company would concentrate on engineering and product to expand the Layr platform to support more industries and partners. Layr, which employs about 14 people, expects to have a team of 30 employees by the end of the year, Naples said.
"The bulk of the investment will be going toward scaling, engineering and product, which will facilitate broader distribution," Egenes said.
As part of the funding, Sandbox Insurtech Ventures Managing Director Chris Zock and Flyover Capital General Partner Keith Molzer will join the company's board of directors.
“Layr addresses some fundamental pain points in the industry: the accelerating interest in engaging customers in an efficient, fully digital format and the rapidly evolving customer needs in the small business segment of the market,” Keith Molzer, general partner at Flyover Capital, said in a statement. “With a platform that can deliver efficient and adaptable coverage for SMBs, we think Layr is particularly well-positioned during this era of economic uncertainty as small businesses look to get back on their feet in the new environment.”
Naples said the investors were a perfect fit for the round due to their experience and understanding of the nuances of insurance.
"It immediately clicks with them because they know what we're doing," he said.
Layr uses AI and machine learning to help small businesses customize commercial insurance bundles. Naples said the startup automates the intelligence of an insurance broker. The Layr platform can tell a customer what insurance they need, why they do or don't need it and what it's going to cost. The hope is to serve all the clients on behalf of insurance agents and brokers.
"We're focused on not losing momentum, but actually accelerating across the board," Egenes said.
When asked about how the pandemic had affected Layr's business, Naples said the silver-lining was that small businesses now more than ever are looking for affordable ways to find and manage insurance.
"Our platform is being adopted by brokers at a higher rate because of Covid," he said.
Egenes said the company has been intentional about what they can do culturally as a company. The startup has launched efforts to host a weekly virtual coffee time, sending swag to new employees
"We're trying to be real intentional about overcoming the challenges that Covid creates, especially from a culture, team-bonding standpoint," he said.
Layr is an ATDC Signature portfolio company. The startup was also chosen as one of Atlanta Inno's 20 Startups to Watch in 2020 in December. The company was founded in 2016 and launched its platform in 2018. Naples and Egenes grew Layr out of Lloyd's Lab's first cohort.
