New venture-capital firm Markd raises $50M to fund insurtech startups

Most kids probably don’t grow up dreaming of working in the insurance industry, but Parker Beauchamp always knew it was what he wanted to do. He grew up in London, where his parents were members at Lloyd’s, the insurance market that in 2020 wrote more than $46.3 billion in premiums.

Beauchamp would tag along with his parents to meetings in the modernist Lloyd’s building from an early age. Even when he was too young to understand what they were doing, he was fascinated by it.

“Most people don’t plan to be in insurance — they fall into it, but It was seriously all I thought about as a little guy through college and grad school,” Beauchamp told BizWest.

Beauchamp spent the past 20 years as CEO of Inguard, an insurance and risk-management firm based in Wabash, Ind. Now, he has come to Boulder and started Markd, a venture-capital firm that aims to fund disruptive, technology-focused insurance startups. Its first fund, Markd Insurtech Fund LP, closed in March with $50 million in equity.

The insurance industry has been dominated by legacy companies with massive cash reserves, and those companies have traditionally been safe, profitable investments. However, investment in insurtech — the use of technology innovations to generate savings and efficiencies in the insurance industry — is at an all-time high, with those companies having raised $10.5 billion in 2021.

As CEO of Inguard, Beauchamp tried to stay ahead of the game when it came to integrating technology into the insurance industry. The company was an early adopter of selling insurance online, and in 2013, it became the first insurer in the world to accept Bitcoin for premium.

Markd has not made any investments yet, but it’s looking for early-stage companies that innovate along those same disruptive lines and have a founder with the makeup to lead a company. Insurtech companies are doing things such as offering ultra-customized policies, social insurance, integrating artificial intelligence, creating on-demand insurance, adopting peer-to-peer models and more.

“The best ones are consumer-focused and make things easier and more intelligent,” Beauchamp said. “No one ever wants to have a claim. How do we put everyone on the same page to significantly reduce hurt and loss? That’s kind of the hero statement of this fund. All these innovations are for the benefit of the consumer.”

When Markd does invest in an insurtech startup, it will benefit from both Beauchamp’s capital and his knowledge of the old-school insurance industry. Legacy insurance businesses are some of the most cash-rich companies in the world, with trillions of dollars on the sidelines with which to pay claims or invest in other businesses to grow their wealth. Those huge cash reserves have typically provided a very wide moat against new competitors, as well as provided investors with a near-certain profit. Beauchamp knows that insurtech startups face an uphill battle.

“To pick up clients, you’re trying to steal a customer from someone who is a major force in the industry,” he said.

Despite that, Beauchamp thinks that people are open to changing the way they buy insurance.

“It’s not un-disruptable, but it’s very hard to find the silver bullet,” he said. “I think there’s a lot of apathy amongst consumers and providers. It’s a hungry environment for people to be successful. There is no lack of funders, money or ideas. I think consumers are waking up to the idea of doing things differently.”

Beauchamp said Markd may open up another funding vehicle, but for the moment, the firm is taking things slowly and trying to find the right match for its initial investments.

“It’s a competitive world,” Beauchamp said. “Everybody wants to win, and that will create a good environment for the consumer.”

This article was first published by BizWest, an independent news organization, and is published under a license agreement. © 2022 BizWest Media LLC.