AgentSync raises $75M for its insurance-focused API business

AgentSync this morning announced that it has closed a $75 million Series B, pushing its valuation to $1.2 billion.

The new unicorn has been on a rapid-fire fundraising clip since TechCrunch first spoke to the company just over a year ago, when it raised a $4.4 million seed round in August 2020. The company stayed busy, raising another $6.7 million that same December.

But the work of bringing modern, digital infrastructure to the U.S. insurance world kept proving to be a growth business. So, AgentSync raised a $25 million Series A in March of this year, increasing its valuation to $220 million. That went up by around 6x in the ensuing few quarters.

Obviously, AgentSync is a startup on the move, so TechCrunch got co-founder and CEO Niji Sabharwal back on the phone to chat through why his company wanted even more capital.

Why AgentSync raised again

Most often when you ask a startup that raised a few times in a year why they added more capital to their accounts, the answer boils down to something along the lines of well, we could. While this rather human answer is understandable, it’s also not very illustrative.

AgentSync was a bit clearer. After getting the company through its 2022 planning process, Sabharwal said it wanted to invest more in its products, which would reduce its runway from five years to two. Hence, AgentSync decided to take on more capital to add staff.

Per the CEO, AgentSync still had around $28 million in the bank when it raised again. By TechCrunch arithmetic, the company closed out its Series B with around $100 million in cash, though that figure may have dipped under the nine-figure threshold since.

What does investment look like for the company? According to Sabharwal, AgentSync is going to double its sales org in the next year, quadruple its marketing team, and double its product and engineering efforts. That’s a lot of folks, and having more cash will make such a hiring ramp simpler.

And, let’s be clear, like other startups out there that raise two or three rounds inside a single year, AgentSync simply could access more capital while multiplying its worth. It’s hard to say no to that. Underscoring just how hot the market is today for quickly expanding startups, AgentSync raised its new round not off a deck, but a detailed investor update, and got its first term sheet within two days of opening the round, though it didn’t select that investor, its CEO said.

Valor Equity Partners led the Series B, which included capital from the ubiquitous Tiger Global. Craft Ventures, Atreides Management and Anthemis also chipped in capital to the round.

What about that valuation, though

Seeing a new unicorn is akin to waking up in today’s market. Get out of bed, read Twitter, see new unicorn. You get the idea.

But with AgentSync, we have lots more data than we tend to get from startups busy raising capital, so let’s chat through some data points.

The following are cribbed from our reporting and a particular piece from Forbes. Citations included, and ARR stands for annual recurring revenue. Note that we have done some extrapolation from various pieces of shared information where reasonable:

• August 2020: $1.9 million ARR [Source]
• December 2020: ~$3 million to $4 million ARR, 4x growth since March 2020 [TechCrunch estimate based on shared metrics]
• March 2021: <$10 million ARR, 6x growth in 2020 [Source]
• December 2021: ~$10.5 million to $14 million ARR, 3.5x growth year over year [TechCrunch estimate based on prior numbers, shared growth rate]

Some of that is messy and approximate, but it gives us an idea of what the company is managing in growth terms. I wonder if our final numbers are actually a bit low, given that with a $1.2 billion valuation, AgentSync would be worth something around a 100x ARR multiple. Which is pretty hot, even for today’s markets, though certainly not impossible.

Regardless, AgentSync has a few key indicators that investors view as lowering its risk profile. Zero customer churn, for example, which for a company of AgentSync’s age is impressive. And the unicorn reported 169% net dollar retention, indicating that once it lands a customer, it quickly sells more to that client. This lowers the company’s costs of acquiring customers compared to their long-term worth, making it more efficient.

And the company is building new products. We’re best acquainted with AgentSync’s original business of passing broker license data between parties. But the startup has moved into providing recruiting data regarding brokers themselves for carriers, for example. Per Sabharwal, AgentSync has launched three new products in the last year.

Let’s see what the company can do with even more capital. Given that AgentSync as a private company is now worth about what neoinsurance providers Root and MetroMile are valued at together on the public markets, investors are certainly betting that insurtech infra bears out to be a better bet than selling coverage itself.