Rainbow Raises $12 Million Seed Funding to Revolutionize Small Business Insurance
SAN FRANCISCO – Rainbow, a digitally-enabled managing general underwriter (MGU) specializing in tailored small business insurance products, announced the successful close of its $12 million seed funding round. Caffeinated Capital, Altai Ventures, Zigg Capital, 8VC, Buckley Ventures, Habitat Partners, and Arch Capital Group Ltd all participated in the investment.
Rainbow focuses its innovative approach on building insurance programs in verticals where the advanced data and technology solutions the company provides bring a distinct underwriting edge. Its flagship offering, an admitted business owner’s policy (BOP) designed specifically for restaurants, is currently active in eight states and projected to expand to over 25 states by 2024.
Exclusively distributed through independent insurance agents and digital partners, Rainbow’s restaurant program addresses a pressing gap in the market as many major carriers withdraw from the restaurant sector.
“Coming out of the pandemic, we saw a clear gap in how traditional underwriters approached small commercial businesses, particularly in the dynamic restaurant sector,” said Rainbow CEO and co-founder Bobby Touran.
“Restaurants are a key category, where every operator needs insurance. Building deep domain expertise and leveraging technology has allowed us to create a customized underwriting process that prioritizes loss ratio and customer centricity.”
Rainbow’s proprietary, scalable platform integrates data-driven insights into underwriting and policy transactions, offering unique value to both agents and policyholders. The platform rewards businesses demonstrating safe practices while streamlining the placement process for agents. This innovative model ensures Rainbow grows its portfolio with a keen focus on loss performance.
Investors have expressed strong confidence in Rainbow’s mission and progress.
We are very impressed by the world-class team at Rainbow and what they have achieved in such a short period of time despite market headwinds,” said Ray Tonsing, Managing Partner of Caffeinated Capital. “The early success of their flagship program underscores the exceptional capabilities of their platform, which is well-positioned for rapid scaling.
Rainbow’s vision goes beyond the restaurant sector. It plans to introduce tailored programs in other business verticals, which will align with its data-centric underwriting approach.
“Customer centricity and vertical depth have always proved capable of delivering above-average underwriting returns while also delivering value to insureds,” said Oleg Ilichev, Managing Partner of Altai Ventures. “Rainbow is building the infrastructure to scale this approach using technology and data, creating a win-win for all stakeholders.”
Agents can learn more about Rainbow’s insurance products and apply to become an appointed producer by visiting userainbow.com/restaurant-insurance-agents or emailing appointments@userainbow.com. The program is currently available in Texas, Michigan, Arizona, Indiana, Utah, Pennsylvania, Ohio, and Tennessee, with plans to expand to 18 additional states in early 2024.
Founded in 2022, Rainbow focuses on developing bespoke small business insurance packages, starting from the restaurant vertical. With a focus on safety rewards and changing insurance needs, Rainbow is redefining what peace of mind looks like for the small business owner. Its quote-to-bind platform is seamless for agents and brokers, and the API for instant quoting is there for digital partners. For more information, go to www.userainbow.com.
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