Delos raises $9mn in HSBC Ventures-led Series A

Wildfire MGA Delos Insurance Solutions has secured $9mn of Series A funding in a round led by HSBC Ventures, a raise that comes as the insurtech expects to hit $80mn in premium for 2024, Program Manager can reveal.

The funding round closed last week, according to sources. Alongside HSBC Ventures’ lead position, sources said the raise included participation from some of the insurtech’s existing investors, including IA Capital and Blue Bear Capital.

Sources also said that Delos is closing in on being profitable as soon as this month, or over the next few months. They added that the MGA is currently writing in the region of $7mn to $8mn of premium each month.

It is understood that Delos, which is led by co-founder and CEO Kevin Stein, will use the funds to bolster its headcount, which currently stands at around 25.

Those new additions will support recent notable hires including Gloria Hendrickson from NormanMax as head of reinsurance and Amrit Williams – who previously worked at CyberCube, Cisco, TransUnion and IBM – as chief technology officer.

Market contacts said Delos being so close to profitability meant it attracted significant investor interest during the Series A funding process. Ultimately, Delos opted to raise a smaller Series A round than initially expected, with the amount sourced based on what it needs now versus having excess capital on its books.

San Francisco, California-based Delos currently offers two programs, one of which is targeted at homeowners and landlords.

The second is a vacant home insurance product launched earlier this year for customers in California which is written on capacity sourced from Lloyd’s.

The MGA is understood to be readying a new high-value homeowners program, which is intended to launch at 1 January, while it also has longer-term plans to bring a commercial property program to market.

Together, its current programs have generated around $60mn in premium so far in 2024, and the MGA expects that will swell to approximately $80mn by year end.

The insurtech currently has premium capacity to write $200mn in 2025 through a deal with AM Best A rated American Family Insurance affiliate Homesite Group Incorporated.

Its products are distributed by 9,000 agents and sold through four different carriers – soon to be five. Growth priorities for the insurtech include expanding into Western states beyond California, as its current total insured value sits at around $40bn.

Delos, whose reinsurance broker is Guy Carpenter, was launched in 2017. The company uses wildfire science and satellite imagery to assess properties it covers in areas of California with limited insurance availability.

It integrates technology and data from its suite of wildfire models into its underwriting and portfolio management, an approach that allows it to identify properties in what are considered stressed areas that do not pose a high risk of loss.

That way it can offer coverage to those properties it assesses as lower risk in areas that are seen as high risk by traditional insurers.

It claims to have been highly successful in its approach and says it has never non-renewed a home for wildfire exposure.

In an interview with sister publication The Insurer a year ago, Delos CEO Stein detailed how major pullbacks from carriers in California have shown that wildfire risk – somewhat like cyber – is evolving from a generalist peril to one that needs to be underwritten by specialists.

A spokesperson for Delos declined to comment.