Newfront Insurance, a San Francisco-based broker, has secured a $200 million investment at a $2.2 billion valuation to modernize insurance, backed by Goldman Sachs Asset Management’s Growth Equity arm and B Capital.
Existing investors, such as Founders Fund and Meritech Capital, also contributed to the round.
“Over the last century, the nature of risk has evolved dramatically, but the insurance business has not modernized to address these new challenges,” said Spike Lipkin, co-founder, and CEO of Newfront. “Newfront’s commitment to creating a modern platform for clients, insurance professionals, and trade partners is strengthened by this investment.”
Newfront intends to expand its technology teams, with a special focus on exploiting data-driven insights for clients, according to a news statement.
In addition, the company intends to expand across the United States and invest in specialized client resources and specialists from a number of industries.
The financing also acts as further confirmation of Newfront and ABD’s merger, which took place in August 2021.
In just seven months, the company has introduced a new client dashboard, improved benchmarking capabilities, hired over 200 new employees, and achieved record-breaking growth while remaining profitable.
“Newfront is the model our industry sorely needs,” said Kurt de Grosz, Executive Chairman of Newfront. “It is one that puts clients and colleagues at the center, and where shareholder returns are linked to producing client value.”
“We are finding that brilliant brokers and insurance professionals are voting with their feet and leaving 100-year-old platforms to join us in quest of a better customer and colleague experience,” said Brian Hetherington, president of Newfront. There’s never been a better time to become a member of Newfront.”
“Our technology teams have spent five years turning pen and paper and systems of record into a system of action that improves the experience for clients, coworkers, and trading partners,” said Gordon Wintrob, co-founder and CTO of Newfront. Our industry will be transformed by structured data.”
“We envision modern, full-stack platforms reshaping broad sections of financial services, and we believe Newfront’s mix of technology, people, and subject experience embodies the future of the insurance sector,” said Paul Pate, Vice President at Goldman Sachs Asset Management. Spike, Kurt, Gordon, Brian, and the entire Newfront team deserve our support as they continue to scale the platform and take the industry forward.”
“At B Capital, we want to finance generational enterprises with broad platform potential,” said Matt Levinson, a partner at B Capital. As the only modern insurance and benefits broker, Newfront has a unique potential to achieve this.
“At its core, Spike and the team recognize that businesses will always prefer to interact with a human broker because their needs are complex and regulations do not follow a template. The ‘bionic broker,’ or the most talented brokers in the country, backed by the best technology stack, is exactly what the sector requires. We believe Newfront will have the opportunity to innovate across the insurance stack – spanning product, capital, claims, and risk management – as they continue to create an essential distribution channel.”