Evertas, cryptoasset and blockchain insurance company, has closed a $14 million funding round led by Polychain Capital. That, in addition to $5.8 million seed financing, puts the company’s total outside investment at $19.8 million.
Other participants in the round include SinoGlobal Capital, CMT Digital Ventures, Foundation Capital, Morgan Creek, Bloccelerate, Matrixport, and Hashkey. Individual investors include Balaji Srinivasan, Andrew Keys, Colleen Sullivan, Tom Howard, Patrick McDonald and David Roebuck.
Evertas intends to use the proceeds of the round to expand underwriting capacity, add key personnel and further develop proprietary enabling technologies and standards.
Founded in 2017, the Chicago-based startup offers insurance products, certifications, and risk management and mitigation solutions.
Earlier this year, Evertas was approved as a Lloyd’s of London coverholder. It also features Arch Insurance and Bitsure as partners.
“2022 has been a very important year for Evertas,” said CEO and Founder J. Gdanski. “It started with our gaining Lloyd’s of London coverholder status and is ending with a substantial vote of confidence by some of the smartest investors in the Web3 world. We will be working overtime to be worthy of that confidence.”
As a Lloyd’s coverholder, Evertas can write and service policies insuring custodial cryptoassets and blockchain infrastructure.
“An investment in Evertas is more than just an investment in a Web3 startup. It’s truly an investment in the entire Web3 space,” said co-Founder and President Raymond Zenkich. “That’s because the enormous cryptoasset insurance gap has impeded, and continues to impede, broad-based blockchain technology adoption. In empowering Evertas, these investors are empowering the entire crypto ecosystem.”
Currently, less than 3% of digital assets are thought to be insured against theft or loss, leaving the market dangerously exposed.
The timing of the round is notable for how it coincides with the extreme tumult generated by the failure of FTX and other crypto custodians. These high-profile events have highlighted the need for, and sparked tremendous interest in, risk transfer products for crypto and blockchain infrastructure. They have also underscored the challenges generated by the extreme lack of insurance capacity afflicting the market.
Regulation-by-insurance is the most cryptonative, free market way to ensure custodians and exchanges implement proper governance and risk controls. When a user sees ‘Insured by Evertas’ they know that a high standard is certified by knowledgeable folks with skin in the game.
The crypto industry currently lacks insurance products and Evertas is well-suited to help fill that gap. The founders are cryptonatives who have a deep understanding of both crypto-asset security and insurance, and are building the right tools, relationships, and products to push the next phase of crypto adoption and maturation.
Blockchain technology is a rapidly growing sector where demand for insurance on crypto assets dramatically outstrips supply and will likely continue to do so long term. Evertas is the first and so far, only player to achieve Lloyd’s of London coverholder status and the regulatory approval required to directly write policies on the broadest range of crypto asset and platform types.
by Peter Sonner