Cybersecurity insurance firm At-Bay raises $185 million, becomes latest unicorn

At-Bay, a provider of cybersecurity insurance, said it has raised $185 million in a Series D financing round, bringing its valuation to $1.35 billion.

At-Bay uses machine learning and other software to assess the cybersecurity risk of firms seeking insurance against such attacks. It underwrites the insurance policies through HSB Specialty Insurance Company, an arm of Munich Re. At-Bay said the technology and autonomous risk-assessment processes it has developed manages to outperform the cyber insurance market on risk mitigation, and keeps the frequency of ransomware claims seven times lower than industry average.

The latest funding was co-led by Icon Ventures and Lightspeed Venture Partners, with participation from existing investors including Khosla Ventures, Microsoft’s M12, Acrew Capital, Qumra Capital, the HSB fund of Munich Re Ventures, and entrepreneur Shlomo Kramer.

The round marks the company’s third funding round in the past 18 months and brings the overall amount raised by the five-year-old company to $272 million, At-Bay said in a statement.

The company said it has seen $160 million in annual recurring revenue on 800% year-over-year premium growth, as the cybersecurity insurance industry reels from ransomware losses. This is causing traditional insurance firms to shy away from providing cybersecurity policies or raising rates if they do, At-Bay said in the statement.

Ransomware attacks have surged globally, with companies having to pay massive amounts to hackers to release their data. Cybersecurity firm Check Point Software Technologies Ltd. said it has seen a 93% surge in sophisticated ransomware attacks in the past year.

“We are seeing a fundamental shift in commercial insurance with regard to cyber risk,” said Rotem Iram, co-founder and CEO at At-Bay. “While legacy insurers are pulling back on coverage and drastically raising rates in the face of challenges like ransomware, At-Bay is doubling down with a modern approach to risk management that helps businesses improve their security and avoid loss before it happens.”

Preeti Rathi, general partner at Icon Ventures, who has joined At-Bay’s board of directors in conjunction with the financing, said that At-Bay has “quickly emerged as a leader in the industry” and has “redefined the role of security within the cyber insurance space.”

“The cyber insurance industry is currently facing an unprecedented ransomware crisis” said Roman Itksovich, co-founder and chief risk officer of At-Bay. “At-Bay has been actively working since inception to be able to adapt and manage these types of risks. Our combination of technical underwriting and active risk monitoring is what keeps us ahead of the curve.”

With the new funding, At-Bay will continue to develop its technology, while launching new products and expanding into new markets, the statement said. The company will also continue growing its team and capabilities to improve the security of its insured businesses.