Analysis: How an AI Insurer reached a $2.6B Valuation on $40MM of Premium
San Francisco based insurance carrier Corgi raised at a $1.3B valuation on 6 May and a $2.6B valuation on 28 May, from largely the same investors. How does this make sense?
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Insurance AI, Insurtech, and an Insurer
Sometimes you just have to immolate a bunch of capital before the world understands what is happening.
One approach to doing this is by giving an insurance company a startup-level valuation based on revenue. This is because insurance companies charge a “premium”, most of which is meant to be paid out in losses when the risks come due. So you charge $100 and then pay out $90, and keep the $10 as net revenue. And then the $10 is financial services revenue in a crowded industry, so you only get a 3x multiple on it.
Case in point is Lemonade, a good company that was valued like a start-up for a while.
But if you put a 10x multiple on the $100, then you have just set up a situation for a lot of losses when the company goes from public to private. And if you put a 100x AI-eats-the-world multiple on it, then the situation is quite a bit more dire.
And that brings us to Corgi, which sells commercial insurance to startups and was founded in 2024 by Nico Laqua, who holds the CEO and CTO titles, and Emily Yuan, the COO. Both came through Y Combinator’s 2024 cohort. Laqua traces the idea to watching his father, a lawyer at USAA, work through claims paperwork by hand, and to the release of GPT-3.5, after which he has described insurance as the largest words-based industry ready to rebuild.
In other words, Corgi is the AI-native version of a vertically integrated insurance company.
The company came out of stealth in January with a combined seed and Series A of $108M, at a $630M valuation. On May 6 it raised a $160M Series B at $1.3B. Three weeks later it raised another $106M at $2.6B.
Total raised in roughly eighteen months is $378M, a number higher than the valuations of many insurtech startups.
You can see the valuation ramp-ups in the charts above, which show both the headline valuations and the increasing prices at which various Series A investors came into the round. This mechanism (an equity bonding curve) seems very good at attracting capital, and nearly 57% of Corgi is now owned by preferred equity investors. Below, we show how different exit scenarios imply different outcomes for those investors. An exit below $500MM for this company would be effectively a failure.
So it has to exit at a much higher price! While fintechs trade at 10-20x revenue, AI-native labs get to raise $500MM seeds at a $5B pre-money. And an AI-native lab that is taking on the entire insurance industry seems like a huge opportunity.
But is this an organic market price? Across the rounds, the investor set in both B rounds is largely the same — Kindred Ventures, TCV, and others appear across the cap table. This is the same hands moving the same asset from one pocket to another and writing down a bigger number each time.
Maybe Corgi is just growing super fast, and the valuation is worth it? One way to pull this apart is to compare the valuation to the market.
Corgi reports more than $40M in annualized recurring revenue since receiving its carrier license, with customers including Deel and Artisan, across general, cyber, and tech-and-AI liability lines. At $2.6B, that is about 65 times revenue.
$40MM in ARR is about $4MM per month — of premium!
It does not disclose a loss ratio, a combined ratio, or how much risk it keeps versus cedes to reinsurers.