Chicago-based Honeycomb Insurance plans to double its head count of 90 employees to 180 within the next 18 months.
The plans come on the heels of a $36 million Series B that the digital insurer announced Tuesday.
The round was led by Zeev Ventures, a solo general partner-led venture capital firm based in Palo Alto, California, that contributed $30 million, or 83%, of the funding. New investors Arkin Holdings and Launchbay Capital contributed to the round, as well as existing investors Ibex Investors, Phoenix Insurance and IT-Farm.
Itai Ben-Zakan, co-founder and CEO of Honeycomb, said one differentiator for the company, at a time when more startups are taking on bridge financing and closing down rounds, was its consistent growth.
"We delivered on a lot of our promises," he told Chicago Inno. "When you come to the table with 4X year-over-year, it does help."
Ben-Zakan said the round came in at "great terms."
The raise follows a Series A the company completed in the beginning of 2022 for $15 million. The provider of digital insurance for landlords will use the new funding to expand into additional insurance markets and invest in the technology.
Honeycomb currently operates in 16 states, covering approximately 60% of the U.S. market, with offices in California, Texas, Pennsylvania, Massachusetts, Ohio, Virginia, North Carolina, Georgia and Tel Aviv, Israel. Honeycomb insures more than $21 billion worth of real estate assets and expects to triple that number in the next year.
Choosing Chicago as Honeycomb's home base
Honeycomb first launched in Illinois, which proved to be a great location for the young startup with its combination of multifamily property inventory combined with moderate catastrophic risk exposure (i.e., natural disasters).
"I was looking for a market that was broken and looking to the fixed with technology that myself and my team can build using data-driven technology solutions and artificial intelligence," Ben-Zakan said. "That's what eventually attracted us to the commercial residential market because it was one of the last remaining large markets of insurance where it was still working in the Stone Age with people filing out paper forms and waiting two weeks."
Honeycomb eventually moved its headquarters to Chicago and now has a team of around 30 people in the state with offices around Union Station.
After launching in 2021, Ben-Zakan said he considered putting the company's headquarters in California, but Chicago made more sense due to its central location. The local talent, especially in the insurance field specifically with companies like Kin Insurance and Zurich launching here, was also a draw for Honeycomb.
As the company looks to double its head count, Ben-Zakan expects Honeycomb to hire another 15 to 20 people locally.
