Federato, an insurtech trailblazer, has secured $40 million in Series C funding to revolutionize risk management through AI. With $80 million raised to date, the company is transforming insurance underwriting, empowering carriers to navigate complex risks with precision and speed.
Let’s investigate what this vote of confidence means for the disruptive startup and the entire insurance industry:
Company Profile: Federato
Founded in 2020 and headquartered in Palo Alto, California, Federato is revolutionizing the insurance industry through its AI-driven underwriting platform, RiskOps.
The company’s mission statement is to empower insurers to optimize risk selection and portfolio management while achieving precision and efficiency in traditionally complex processes.
Federato serves a diverse clientele and has a wide-reaching impact on sectors ranging from wildfire insurance to commercial trucking.
The company currently operates across the United States and is actively expanding its global footprint into regions such as the UK, Europe, LATAM, and APAC. Federato’s approach has yielded impressive results for its clients, such as a reported 90% improvement in time-to-quote metrics.
Some of the other remarkable results they claim to have helped their clients achieve, include:
- A 90% reduction in systems used
- An 11% increased hit ratio
- 3x high-appetite quotes
- 2x submissions processed daily
- An 89% reduction in time-to-quote
- A 30% lift in high-appetite premiums
Co-founder and CEO Will Ross described Federato's innovation as focusing on “optimizing what no human could do or had time to do,” reflecting the company’s mission to address industry challenges through technology.
Among their more notable clients, you’ll find names like Vertico Risk, Ledgebrooks, and Hyundai Insurance. With its innovative solutions and commitment to advancing the insurance landscape, Federato has quickly become a recognized leader in leveraging AI to meet evolving industry challenges.
Will Ross and William Steenbergen: The Dynamic Duo Behind Federato
Federato's founding was rooted in a shared mission to use advanced AI solutions to address complex challenges in the insurance industry.
Will Ross and William Steenbergen met in 2021 while collaborating on a wildfire modeling project. Their work on modeling fire risks led to deeper insights into the broader inefficiencies within the insurance industry, particularly in underwriting.
Will Ross: Visionary CEO and Industry Pioneer
Will Ross’s professional journey began at IBM’s Watson group, where he played a pivotal role in integrating data from The Weather Company to build innovative environmental models.
This experience honed his expertise in leveraging big data for decision-making. After leaving IBM, he pursued further education at Stanford, where he continued developing optimisation and problem-solving skills in high-stakes industries.
As Federato’s CEO, Ross leads the company’s vision to streamline insurance underwriting through AI. Speaking on Federato’s mission, he explained, “We had a shared thesis that AI could better be applied to optimizing what no human could do or had time to do versus automating away low-value tasks.”
William Steenbergen: Technical Mastermind and CTO
William Steenbergen brings a robust technical background to Federato. His background is largely shaped by his experience as a data scientist and engineer at Building Blocks, where he developed AI-based solutions for retailers and insurers.
While pursuing research at Stanford, Steenbergen focused on reinforcement learning applications, publishing work on educational chatbots and offline RL models.
As CTO, Steenbergen ensures Federato’s RiskOps platform remains at the forefront of AI innovation, bridging cutting-edge technology with practical industry needs.
The Global Insurance Market: Opportunities and Challenges in 2025
According to Deloitte, the global insurance market is undergoing significant transformative shifts driven by economic, environmental, and technological factors. Amongst others, high inflation, unpredictable climate-related risks, and evolving consumer demands have pressured insurers to innovate.
For example, property and casualty (P&C) carriers in the U.S. rebounded in 2024 with $9.3 billion in underwriting gains due to premium hikes and improved investment returns. Simultaneously, non-life insurers globally faced a $234 billion protection gap, highlighting unmet needs, especially in developing regions like Asia and Africa.
Technology, particularly AI, is becoming indispensable as insurers strive for efficiency and customer-centric solutions. Innovations like embedded insurance and predictive analytics are helping insurers tailor products, improve risk assessment, and streamline operations.
In fact, Deloitte estimates that AI-related insurance premiums could reach $4.7 billion annually by 2032, growing at a staggering 80% compound annual rate. Embedded insurance is another growth area, projected to generate over $722 billion in premiums globally by 2030.
Despite these advancements, insurers face hurdles, including rising litigation costs ("social inflation") and demands for transparency in AI-driven decision-making. Regulatory pressures are also mounting, with frameworks like the Task Force on Climate-related Financial Disclosures pushing for better climate risk accountability.
Amid these complexities, Federato's rise reflects a broader industry trend toward “insurtechs.” Its AI-powered RiskOps platform addresses pressing inefficiencies, such as slow underwriting and data silos, allowing insurers to navigate risks with agility.
Federato's Funding Journey
This latest influx of $40 million sees Federato’s total funding top $80 million across three rounds.
The most recent round of Series C funding was led by StepStone Group. It follows on a $25 million Series B round in June 2023, led by Caffeinated Capital, and a $15 million Series A that ended in September 2022, backed by Emergence Capital.
While not tied explicitly to a valuation, it does illustrate a growing confidence and excitement surrounding the company’s ability to make a mark on the insurance industry.
Post its previous Series B funding round, the company was valuated at $125 million — a clear indicator of its upward trajectory. By comparison, its competitor Duck Creek was acquired by Vista Equity Partners in 2023 for $2.6 billion.
Despite this high valuation, CEO Will Ross is even more upbeat about the company’s current fortunes, declaring that the latest funding amounts to a “serious, significant up round” for the startup.
With the global insurance industry valued in the trillions and underwriting identified as a critical area for AI application, Federato is strategically positioned to capture a significant share of this evolving market.
Conclusion
With a significantly bolstered war chest, Federato is poised to lead the future of insurance. As it has already shown, its cutting-edge AI will continue to tackle industry challenges, deliver transformative results, and redefine global underwriting standards for insurers.
