Pathpoint, a Washington, D.C.-based digital insurance wholesaler, has raised $12.5 million in a round led by San Francisco-based Caffeinated Capital. Its prior investors include Founders Fund, Chubb, Hiscox and SciFi VC. So far, the six-year-old startup has raised $42.5 million from investors.
Founded in 2017 by CEO Alex Bargmann and software engineer Jay Palekar, Pathpoint focuses exclusively on a segment of business known as excess and surplus, or E&S, an estimated $52 billion market ignored by standard insurers because of higher risks. Pathpoint has built technology that can accelerate policy processing and approvals in minutes, and is licensed in all 50 states, besides being a cover-holder at Lloyd’s of London.
“Given the growth over the last 6 months, it became clear to us that we needed to invest more,” Bargmann said after the funding round. “The investment from Caffeinated Capital unlocks this while setting us up to build a profitable wholesale intermediary with national distribution.”
Caffeinated Capital’s managing director, Raymond Tonsing, said the funding is about “deeply investing” in Pathpoint’s go-to-market function. “Data indicates that agents who can try Pathpoint even once love using it, but there’s still untapped opportunity in terms of getting in front of more agents and deepening relationships across the distribution base,” he said.
Caffeinated Capital has raised $250.8 million from six funds, and made 143 portfolio investments. It has made 10 exits.
Ex-colleagues
Bargmann and Palekar briefly worked together at HVF Labs, a San Francisco venture firm focused on data analytics startups, before co-founding Pathpoint in 2017, with the goal of streamlining coverage for the E&S surplus lines. Palekar received a B.S. degree in applied physics from Caltech. He has also been a summer analyst at Goldman Sachs and a summer research fellow at MIT’s Sloan School of Business. Bargmann received a B.A. degree with honors in history from Claremont McKenna College.
Over the years, Pathpoint has built custom technology to service the E&S lines market, and to bring new efficiencies. “There is currently no other solution that gives agents such a fast, simple, and efficient E&S experience,” Bargmann claimed. Pathpoint’s platform claims to reduce time to provide quotes from days or weeks to minutes, streamlining various documents and processes. The end result helps retail insurance agents receive quick quotes from multiple, A-rated carriers in the Contractors, Vacants, Lessor’s Risk, Monoline Property, Restaurants, and Cyber verticals.
Commercial Real Estate
MacKenzie Companies
Advertising / Media / Communications / Public Relations
Nevins & Associates
Financial Services / Investment Firms
Chesapeake Corporate Advisors
Commercial Real Estate
Monday Properties
Venture Capital
Blue Delta Capital Partners
Internet / Technology
Foxtrot Media
In a year-end note, Bargmann cited significant progress. Pathpoint onboarded over 5,000 agents and partnered with 17 top networks, aggregators, franchises and digital platforms, he said. For the entire year, the firm’s monthly active users grew 17% month-over-month and gross premium rose 16% month-over-month. Pathpoint also claimed efficiency gains —cutting average time to quote, from first starting a submission, to under seven minutes and time to bind, from first submission, to less than a day.
“In terms of agent experience, the E&S market is 10 years behind the admitted market. Our goal is simple — fix this divergence,” Bargmann wrote in his note.
In 2022, Pathpoint made progress on the digital side too, building two API partnerships and priming two more for launch in 2023. “Pathpoint is the only place that offers instant, bindable quotes, access to multiple blue-chip E&S markets through a single application, and e-signing for E&S coverage,” said Bargmann.
