Co-Founder & CEO
February 7, 2024
Today we’re thrilled to announce Shepherd has raised a $13.5M Series A, led by Costanoa Ventures alongside Intact Ventures, Era Ventures, Greenlight Re, and Spark Capital. We're excited to welcome Mark Selcow, General Partner at Costanoa, to our board.
Our mission at Shepherd is ambitious but clear: to create the first comprehensive platform that combines top-tier insurance offerings with world-class software to help commercial businesses manage risk and prevent losses. We’re starting with the $10T commercial construction industry.
Since our launch in mid-2022 the past 18 months have been an incredible journey of growth, expansion, and market validation. Today we support virtually all of the top 20 national retail insurance brokers operating in construction with nearly 200 offices around the country relying on Shepherd for capacity, innovative underwriting, and our 24-hour submission-to-indication turnaround. This new capital is an important milestone for Shepherd, and we’re humbled by the overwhelming support from our brokers, partners, investors, and clients.
Our thesis is that technology can solve the sustainability challenges facing commercial insurance, and to accomplish this we’re building a platform that incentivizes our clients to adopt the best tools when they buy our coverage. Across construction and other commercial markets, technology is available but fundamentally underutilized, despite the potential for improving loss outcomes and stopping this crisis.
Across the $25B premium U.S. commercial construction market several troubling themes have emerged in recent years: exploding claim severity, archaic underwriting processes, and underutilization of technology. Together, these issues are making insurance more expensive and less sustainable.
Since launching our inaugural insurance products in 2022, we've witnessed extraordinary growth and excitement around our mission:
3x increase in lead generation year-over-year
5x growth in Gross Written Premium year-over-year
Expansion from a single product offering (Excess liability) to four, encompassing all three primary casualty lines (General Liability, Commercial Auto, and Workers’ Compensation)
In the insurance industry, risk reduction is mutually beneficial for both insurance companies and clients. Yet, clients have traditionally shouldered the responsibility of procuring and managing risk management software. Considering contractors' tight margins (3-5%), investing in back-office and risk management solutions is often not feasible. That’s why we’re changing it: All of Shepherd’s software offerings are completely free to policyholders.
The first app we built solves a common problem for commercial businesses: tracking and managing 3rd party compliance. Contractors experience this pain point acutely, as most hire hundreds or thousands of subcontractors and vendors on an annual basis for their projects. Each one of these counterparties submits proof of coverage (certificate of insurance) and policy endorsements that are collected and reviewed by contractors on every project.
The painstaking process of extracting data from PDFs and manually tracking with internal systems is both tedious and expensive. To streamline this process, we’re leveraging AI to parse documentation and automate the review process for our customers.
Shepherd Compliance can be used on a standalone basis, or integrated with an existing technology ecosystem. There are 3 key features:
Using AI to extract certificate of insurance (COI) or endorsement data
Automating compliance reviews based on customizable project-based requirements
Integrations to project management systems such as Procore to streamline outreach and workflow
Two years ago we began developing a full stack solution to underwrite insurance products in minutes instead of weeks. We’ve engineered features such as automatic loss run parsing that have created enormous leverage for our underwriting team. Our underwriting speed has become our secret sauce with retail insurance brokers – we averaged just 17 hours from submission to indication in all of 2023 – speed is a simple but powerful input to access a wide set of opportunities.
With the efficiency of broker-led distribution driving our growth, we turned our focus to our software products, of which Shepherd Compliance is our first major product release. Beyond building and shipping our own software in-house, we’re also connecting with other best-in-class 3rd party resources that clients access through our marketplace.
In 2024, we’re going to invest heavily in our engineering and underwriting teams, doubling down on the areas that have fueled our growth to today. We plan on launching at least 2 new insurance products as well as continuing to build out our risk management software platform.
Shepherd has, and will continue to be, an in-person culture first: we attribute much of our success to the direct collaboration between underwriters and engineers. We also recognize the importance of being face to face with our brokers and clients which is why we focus much of our technology on unlocking more time to visit our partners and learn about their challenges in person. You can find us in our growing San Francisco headquarters, or our newly opened New York City office!
We're actively seeking talented underwriters and software engineers to join our team and mission. Construction is one of the most important industries in the world – help us make it safer and more sustainable. If what we’re building excites you, check out our job postings here!
Read more from Shepherd
Introducing Shepherd AI Compliance: Advancing Construction’s Insurance Technology
The first offering of Shepherd's free software platform for insureds
Co-Founder & CEO
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Underwriting with superpowers: parsing claims data with OCR
Using technology to give underwriters a superpower
January 11, 2024