Much of the success in venture-backed software over the past two decades has been replacing filing cabinets, emails, spreadsheets, and word processing with bespoke workflow applications. This little tidbit, along with a passion for learning about less understood vertical markets, has been the core of my investment work. KeepTruckin digitized government compliance for trucking to unicorn valuations, Scout RFP created dedicated workflow for strategic sourcing to the point of a $540M acquisition by Workday, and Spruce is bringing much-needed automation to the closing process for the residential real estate and lending industries. In this same vein, I am excited to announce Scale Venture Partners is leading the Series B round for Archipelago.
Much like homeowners insure their homes, the largest real estate holders in the world insure their properties as well. Insuring a billion-dollar-plus portfolio (for example, the Salesforce Tower or all Costco locations) is not conceptually different than insuring an individual property. You provide an insurer with the details and attributes of a property you want to insure. The difficulty arises in tracking and maintaining what is in a portfolio, and the multitude of properties you must aggregate this data for, and then putting that into a “portfolio view” of the overall risk. This is where Archipelago comes in, helping real estate professionals move from custom spreadsheets into a cloud software application that ingest all their data, normalizes values, augments with third-party data, and provides tailored insights and analytics. The software not only aids the real estate owner but enables the communication and workflow of insurance procurement, bringing together brokers and carriers that want to underwrite the risk.
It is impossible to talk about Archipelago without highlighting the two founders, Hemant Shah and Roger Bodamer. If there has ever been founder-market-fit, this may be the opportunity.
Exceedingly understated in his demeanor, Hemant is an OG of InsureTech (long before the phrase existed), having founded RMS Analytics as a graduate student in the 90s, successfully growing it to an industry standard with hundreds of millions in revenue over an almost thirty-year period. The list of early Archipelago customers and users is the Who’s Who of the industry, a direct reflection of the relationships and trust Hemant brings with his background.
On the other end, Roger has spent his career building complex systems at the intersection of databases, cloud, and enterprise needs (a friendly face to the Scale family for years). Archipelago can abstract complexity through his team’s brilliant engineering and database architecture that delivers a simple, intuitive, and customer-centric experience to each user.
Finally, a shout out to former Scale Venture Partners portfolio executive and EIR Tim Anglade who is VP of Product. The connections are deep on this one!
Archipelago is a young company and much of 2021 will focus on meeting the needs of early customers. Having the largest companies in your category as early customers is a blessing, but also demands flawless execution. Growing with those customers means not only serving the property owners, but also meeting the needs of their brokers and carrier partners who are increasingly seeing Archipelago as a product that they can use to optimize and differentiate their businesses.
While this industry underwrites over $90 trillion in value annually, the absolute number of end customers is finite, and a core part of the risk we underwrote. How does one build a large business in a large industry with a small customer count? Our diligence revealed an incredibly exciting product roadmap, strong opportunities of tangential needs from customers, and a management team with a penchant for listening to customer problems. Our bet is on this team and their ability to tackle this problem head on. We feel incredibly fortunate to have a front-row seat as the movie unfolds. We are barely past the opening scene!
As with all the work that we do, this investment was a collaborative effort with big thanks to Chris Yin and John Gianakopolous for their contributions. Rory O’Driscoll was particularly helpful in identifying this opportunity and encouraging the team in my direction. And thanks to existing investors Rich Boyle at Canaan, Nick Sturiale at Ignition, and Ryan Orley at Zigg Capital for supporting our proposal. We are fans of all of you.