Rainbow, a digitally-enabled managing general underwriter building tailored small business insurance products, has announced raising $12 million in seed funding with participation from Caffeinated Capital, Altai Ventures, Zigg Capital, 8VC, Buckley Ventures, Habitat Partners, and Arch Capital Group Ltd.

Led by an experienced team of repeat entrepreneurs, the company brings a fresh perspective to small business insurance by launching programs in specific verticals where Rainbow's approach to data and technology delivers an underwriting advantage. The company's flagship program, an admitted business owner's policy (BOP) product specifically tailored to the restaurant industry, is currently live in 8 states and is expected to be available in over 25 states in 2024. Exclusively distributed through independent insurance agents and digital partners, Rainbow's restaurant program offers producers a specialized appetite at a time when many name-brand carriers are exiting the restaurant class of business. 

"Coming out of the pandemic, we saw a gap in the process of other underwriting companies and carriers focused on small commercial, and this was super clear with restaurants and their ever-evolving nature," said Rainbow's CEO and co-founder Bobby Touran. "Restaurants are a massive category where every operator requires insurance, and it has proven to be a challenging class for many capacity providers. We felt that building deep domain expertise in the verticals we focus on would allow us to use technology to tailor our underwriting and prioritize loss ratio, all while maintaining the critically important customer-centric approach to small business."

Rainbow's engineering team has developed a proprietary and scalable platform for underwriting and transacting every submitted risk. The company's interwoven approach to utilizing data and technology in its underwriting creates differentiated value for both agents and insureds — rewarding policyholders that demonstrate prudent operations, and streamlining the placement of accounts for agents, all while ensuring that the company is growing its book with a focus on loss performance.

"We are deeply invested in Rainbow and its world-class founding team, which has accomplished so much in such a short time since inception and despite market headwinds," said Ray Tonsing, Managing Partner of Caffeinated Capital. "We are extremely encouraged by the early traction of their flagship program, and their exceptional platform capabilities have them poised to scale rapidly".

The company's vision extends beyond the food service class, with plans to launch specialized programs in additional business verticals that align with Rainbow's underwriting approach and vision.

"We have always observed that customer centricity and vertical depth allows MGAs and carriers to generate outsized underwriting returns, all while being a valuable partner to the end insured. It's one of the ways to create a clear win-win scenario in the insurance industry. We believe that Rainbow is creating differentiated infrastructure to enable this type of approach to work with technology and data." said Oleg Ilichev, Managing Partner of Altai Ventures, a leading insurtech and fintech specialist venture capital firm.

Agents are encouraged to visit userainbow.com/restaurant-insurance-agents or email appointments@userainbow.com to learn more about Rainbow's insurance products and appetite, and to apply to become an appointed producer.  Rainbow is available today in the states of Texas, Michigan, Arizona, Indiana, Utah, Pennsylvania, Ohio, and Tennessee with plans to be live in 18 additional states in early 2024.