SAN FRANCISCO — Shepherd, an insurance tech platform for commercial construction, has raised a $13.5 million Series A funding round led by Costanoa Ventures with participation from Intact Ventures, Era Ventures, Greenlight Re and Spark Capital. Shepherd combines insurance together with software to help contractors save on premiums. The company will utilize the funds to expand its underwriting and software team, accelerate product development and scale its software offerings.
“There is an urgent need for innovation in the commercial construction insurance industry,” said Justin Levine, CEO of Shepherd. “Our mission at Shepherd is ambitious but simple: 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.”
Shepherd combines insurance capacity with fast underwriting, risk management software and a construction software marketplace to streamline tedious processes and workflows. Its technology-enabled underwriting process has an average response time of 12 hours, which is weeks faster than the rest of the industry.
Over recent years, exploding claim severity, archaic underwriting processes and underutilization of technology in the commercial construction industry have threatened to make insurance even more expensive and less sustainable. Between 2010 and 2020, the median personal injury award increased nearly four times, causing carriers to reduce their project underwriting by 40% or more. Without radical innovation, the $10 trillion commercial construction industry will eventually become uninsurable.
In response to these macro trends, Shepherd is also rolling out a new software solution, Shepherd Compliance, to streamline and automate vendor compliance reviews: a tedious and error-prone process that is vital for large businesses that need to validate coverage from their downstream vendors on every project. Shepherd Compliance uses artificial intelligence to review PDF-based data and automate the management of all related workflows. The software is optimized for Shepherd policyholders and also integrates with project management platforms, like Procore, ensuring ease of use across existing systems.
“Commercial construction is a central and vital driver to the overall economy, yet has been overlooked by technology providers for years,” said Mark Selcow, general partner at Costanoa Ventures. “High insurance costs and even unavailability of coverage plagues a sector already struggling with tight margins and business risk. The team behind Shepherd is taking a technology-forward approach, developing innovative insurance products that use modern software and data techniques to create a vastly superior insurance offering. Shepherd delivers better priced, better fit policies for clients, thanks to its data and tech advantages.”
Since its launch in 2021, the top retail insurance brokers nationwide operating in construction rely on Shepherd for innovative underwriting and its 24-hour submission-to-indication turnaround. In under 18 months, the company achieved five-fold growth in Gross Written Premiums year-over-year and expanded from a single product offering (Excess Liability) to four, encompassing all three primary casualty lines (General Liability, Commercial Auto and Workers’ Compensation).