European internet insurance startup Stoïk secures $27 million

Cyber risk has become a critical issue for small businesses around the world. Although many companies try to avoid and reduce cyber risks, they rarely discuss transferring those risks to someone else.
That’s why Stoïk is introducing an online insurance product designed for small and medium-sized businesses. The French startup recently raised a Series B round of 25 million euros (about $27 million at current exchange rates).
In many ways, Stoïk follows in the footsteps of the Coalition or At-Bay. However, instead of selling its insurance products to US-based companies, Stoïk focuses exclusively on European companies.
Once insured with Stoïk, businesses receive coverage in the event of a cybersecurity-related claim. For example, if a company needs to stop production or shut down temporarily due to a cyber incident, Stoïk can compensate for the loss of income (net of operations) during that time.
Stoïk currently covers companies with an annual turnover of 750 million or less with coverage limits of 7.5 million euros. Currently, the company operates in France, Germany and Austria.
The startup chose this specifically because internet insurance is more complex than other types of insurance products. For example, Stoïk has built a small in-house crisis management team to respond to incidents and help with data acquisition and problem communication.
“Since the beginning of the week, we have had multiple attacks on our portfolio, including a major one,” founder and CEO Jules Veyrat told TechCrunch last week. “We have people gathered in the Lyon region to attack the ransomware that stopped the industrial company.”
When customers sign up, they get a summary of their online exposure. The launcher monitors DNS records and scans online databases for password leaks related to this domain name. Stoïk can also run internal scans to recommend changes to cloud and operational settings.
“Our idea is that we will include insurance companies. In addition, we will help them better protect themselves from cyber attacks. That way, they are happy, they get more for the same price. And we are happy, because we have well-protected policyholders, so we have fewer claims than others,” said Veyrat.
There are still some similarities with the insurance industry as a whole. Like other insurance companies, Stoïk must ensure that it does not accept too many bad apples in its customer portfolio, as this could have a significant impact on the company’s loss ratio.
“The job of insurance brokers is to select risks. So, who would I accept and under what conditions? How well do they understand cyber?” Veyrat said. “In other words, am I willing to take on a €50 million industrial company that doesn’t have an offline backup strategy? This is just an example, but these are questions we ask ourselves every day.”
Stoïk works as a Managing General Agent (MGA), which means that it works with insurance companies and reinsurance companies to cover risks. Stoïk gets to create its own prices, products and policies – but transfers the risk to the big insurance companies.
One such partner is Tokio Marine HCC International, the only new investor in the Series B funding round. The rest of the round was made by existing investors. Alven is leading the Series B with Andreessen Horowitz, Munich Re Ventures, Opera Tech Ventures and Anthemis also participating.
Stoïk does not sell its insurance products directly to its customers. Instead, it works with third-party insurers that already have relationships with SMBs. To date, Stoïk has attracted 1,000 insurance brokers.
By the end of 2024, Stoïk should have 5,000 policyholders. It represents €25 million in premiums. Stoïk plans to increase customer enrollment in the future. In the future, the startup expects to expand to a new country every year starting with the new European market in late 2024 or early 2025.
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