Raincoat, a Puerto Rico-based startup that provides insurance solutions for weather-related disasters, raised US$4.5 million in a seed round led by Anthemis. With the new round, the company will have around US$4,650 in funding.
Also participating in the raise were SoftBank Group’s SB Opportunity Fund, Banco Popular de Puerto Rico, Chilean financial group Consorcio, Miami-based 305 Ventures, and Divergent Capital, which focuses on deep tech.
According to the latest report from the UN Office for Humanitarian Affairs, Latin America and the Caribbean are the second most disaster-prone region globally. The report also states that from 2000 to 2020, 152 million Latin Americans and Caribbeans were affected by 1,205 disasters such as floods, hurricanes and storms, earthquakes, droughts, fires, extreme temperatures, and volcanic events.
Faced with this situation and after the aftermath of Hurricane Maria in Puerto Rico, Raincoat came into being in 2017. The company is based on the parametric insurance model, those whose payments are made based on the magnitude of an event. Among its advantages is that payment is made faster than in traditional insurance as it is not dependent on the assessment of damages but is triggered when the event reaches previously established parameters.
“[Latin America] is a region where the population exposed to the consequences of natural disasters is high and most do not have access to insurance,” Jonathan Gonzalez, co-founder and CEO of Raincoat, told Contxto.
Raincoat’s approach is B2B2C. Its weather insurance solutions seek to provide end-to-end automated products to governments, financial institutions, and insurers to protect people affected by natural disasters such as hurricanes, earthquakes, or floods.
To do so, the startup provides its clients (insurance companies, banks, governments, etc.) with a technology platform that allows them to launch parametric insurance products that protect individuals affected by weather events, providing automatic payouts upon the occurrence of a loss.
“Our team delivers a fully operational and tailored solution that can be integrated into our partners’ existing channels, making it easier to respond to people,” said Jonathan Gonzalez.
The CEO added that the company brings together all local and industry regulations, capacity, science, data, and software development to deliver an accurate and functional automated parametric insurance product that covers all stages of a policy’s lifecycle.
With the new capital, Raincoat will seek to expand its services worldwide. The startup informed that it already has active corporate projects in Puerto Rico, Jamaica, Mexico, and Colombia. However, they will also arrive to Chile, the Dominican Republic, Brazil, and the United States, said its CEO. He also said that they will not limit their entry to other countries where Raincoat’s solution could be of benefit, such as South Asia and other Caribbean countries.