Contractor Insurance Innovator Bunker Raises $6M in Series A Round

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Bunker, a San Francisco-based “digital business insurance platform” startup, announced a $6 million Series A funding round in addition to the full commercial launch of its services platform. The round was led by Omidyar Network and included Comcast Ventures and Route 66 Ventures. Bunker raised $2 million of seed funding less than a year ago.

Bunker, founded in 2015 to deliver an entirely new small business insurance buying experience, is a licensed insurance broker in all 50 states and works closely leading insurance carriers in building new and unique products, according to the press release. Bunker’s insurance marketplace for contractors, and the businesses that use them, enables the delivery of “the exact business insurance policies at the moment they’re needed.” Two of the three Bunker founders have substantial insurance industry product and distribution experience.

CLAIM YOUR FREE COPYThe Impact of Disruptive Technologies and Solutions on Contingent Workforce and Services Procurement

But Bunker is not just another wide-eyed, capital slurping startup in the contingent workforce and services space. It is one that should be of immediate, practical interest to indirect and services procurement practitioners who are or will increasingly be sourcing, engaging and managing the risk of individual or microbusiness contractors.

Bunker Today

Back in January, Spend Matters covered Bunker in an article highlighting how the start-up was solving a big problem for both businesses and independent contractors:

  • Organizations of all kinds require that their independent contractors carry various forms of business insurance (e.g., general liability, professional liability, worker’s compensation, auto liability, criminal and even cyberliability).
  • Independent contractors, as such, have been around for a while, as have inadequate insurance purchase options (products and point of sale). Not being able to find and secure the right coverage is detrimental both for contractors and organizations.

Now, in the context of the so-called gig economy, where more critical talent is choosing to work independently, the business insurance gap discussed above will widen. This is a pain point Bunker, however, has begun to address.

“With the continued rise of the gig economy and the sheer speed of business relationships, we need more flexible insurance products delivered in the simplest and quickest way,” said Rob Veres, venture partner at Omidyar Network, in the press release as saying. “Bunker is changing the point-of-sale for small business insurance, and we’re pleased to be backing them.”

Bunker CEO Chad Nitschke also noted in the press release that “one of the biggest insurance challenges that businesses face is figuring out how to comply with and track requirements for all the contracts they enter into — leases, service agreements, IC engagements, loan covenants, etc. Neither the insurance nor legal industries are easy to tackle.”

“And when you combine them,” he continued, “it’s near impossible. That’s why Bunker is here, embedding insurance into the process, making compliance simple for everyone involved.”

Innovation in Action

Bunker is not just closing up a major gap in the insurance marketplace — which will benefit contract workers, small suppliers and the business — it is necessarily making that happen through significant innovation. When we talked with Nitschke in January, he shared with us some innovative paths Bunker was pursuing for usage-based insurance and a workers comp surrogate.

We had a chance recently to catch up with Nitschke, who told us the following:

“In terms of new products, we have a few exciting things in development that we're not quite ready to take the wrapper off yet. One feature, however, that we are public about (and has seen quite a bit of interest) is using our proprietary data set to help organizations set more effective insurance requirements. This means correlating requirements according to actual risk, (i.e. not requiring an IC working on a small project to carry the same level as a company working on a large project). We are building additional tools around this given the interest, today it's a real pain point for everyone involved.”

Nitschke also responded to our question about how the new investment will move Bunker forward, saying, “The funds will be used to create new and specialized insurance products for our customers, in addition to accelerating platform features and growth. We're adding to the team in both our SF and Madison offices, recruiting Bunker evangelists who share our passion for solving small business insurance problems in a truly unique way.”

Conclusion

As we have noted elsewhere, contingent workforce and services procurement practitioners are beginning to face a dazzling array of new sourcing options and opportunities that have the potential to benefit their organizations and make the lives of their business users easier and more productive. Innovative value propositions often originate from startups, of which there are many. Understanding which of these new providers has something to offer that solves a real problem today and will solve more tomorrow is not only time-consuming — it’s actually impossible. Bunker, however, is one you can put on your shortlist to check out.

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