Seed funding fuels insurtech upstartBy Kate McCaffery | November 02 2017 07:00AM
New insurance technology company, Finaeo Inc. wants to be the next front office (and back office too) for financial advisors who are interested in adopting a digital-first approach to running their business.
Rather than rely on pen and paper, excel spreadsheets, dictation programs and outdated contact management systems, the firm wants advisors to embrace a more bionic way of doing things – in the moment, connected to one central platform. Moreover, it wants to create a carrier marketplace and begin processing business by the end of 2018.
The technology available today from Finaeo is a customer relationship management (CRM) offering with an artificial intelligence (AI)-powered digital assistant. Finaeo co-founder and CEO, Aly Dhalla says initial funding for the project came from advisors who were asked to test the product.
“We actually ended up raising the first $250,000 of angel capital from our advisor network who were part of that beta (test). It was a very promising sign that we were solving a real problem,” he says. “So we took on the moniker ‘for advisors by advisors’ and continued on our journey. We built more technology and ended up just recently closing an institutional round of $2.25 million.”
“Our core priority right now is solving the front-end, front office problem for advisors, and to build as much of a distribution network as possible, as quickly as possible.”
This next infusion of cash will be used to hire engineers and cover operational costs.
To realize his plans for the future where advisors are able to process business from the same platform, Dhalla says he will be working to augment carrier interest in the project.
Starting a pilot
“We have two major carriers already onboard to start a pilot and to start running transactions through us,” he says. “But we need to be a marketplace. Before we really launch anything at scale, we want to make sure we have at least five suppliers on side.”
“Digital is on every single insurer’s agenda. Trying to create a better customer and advisory experience is very high on their list,” he adds. “If suppliers are going to make it through the digital era, which I believe they will, they have no choice but to take the next step.”
While Dhalla says he would prefer to partner with managing general agencies (MGAs) or another back office supplier to realize the company’s vision, he says the company plans to move forward, with or without that support.
“We have a pretty good understanding of what a back office needs. We can build it and connect it faster than it would probably take to integrate with an existing one, but I don’t want to reinvent the wheel if I don’t have to,” he says. “We do not want to try and cut people out or be ‘disruptive.’ We want to be truly innovative.”