Insurtech giant Equisoft lands $125M investment, eyes acquisitions

Montreal-based Equisoft, an insurance and investment software developer, today announced that it raised $125 million in venture equity. It's a large amount made more significant by the fact that the investment climate for insurtech vendors is growing increasingly challenging.  A recent Gallagher Re report found that quarterly insurtech funding for Q4 fell to the lowest level since Q1 2020, decreasing 57% quarter on quarter from $2.35 billion in Q3 to $1.01 billion in Q4.

$70 million of Equisoft's new tranche came from Investissement Québec and the government of Québec, with the remainder coming from Export Development Canada and Fondaction. CEO Luis Romero says that the funding will be put toward "global expansion," both "organically and through strategic acquisitions."

"The funding will strengthen our balance sheet and accelerate further development of our integrated life insurance software platform and wealth products to better serve our global customer base," Romero told TechCrunch via email.

Romero founded Equisoft in 1994 along with a friend he'd worked with in the IT department of an actuarial consulting firm. They left the company together to pursue a more entrepreneurial path. At the time, custom-built solutions were the trend, and -- according to Romero -- he and his friend had the opportunity to build an asset allocation software for a mutual fund company. That software formed the basis for Equisoft.

"The original software was delivered on three floppy disks," Romero said. "We made 1,000 copies of it and packaged it in fancy boxes to send to financial advisors. This product evolved from floppy disk to a software-as-a-service (SaaS) solution, and in the early 2000s, we added system integration into our offering. We then evolved to focus on a core set of solutions where we knew we could be the best."

Equisoft was a self-funded company for 24 years, up until 2018. In 2018, in order to "accelerate growth" (as Romero puts it), Equisoft opened up to investors, securing around $17 million in its first round of funding.

"Our reasoning back then was we wanted to invest in our core SaaS solutions and the specialized services surrounding them," Romero said. "We believed that there was a significant opportunity to continue to grow our customer base across the life insurance, wealth and asset management markets in the Americas and beyond."

Image Credits: Equisoft