Two Huge Markets to Benefit from a Digital Transformation
Today, I am excited to talk openly for the first time about Archipelago, a new company that is digitizing the risk profile of large commercial properties. Canaan led the seed round over two years ago and the company represents a unique blend of interests for me – real estate, artificial intelligence and insurance. My enthusiasm for the company has only grown as I’ve watched the Archipelago team execute a classic startup playbook: identify a massive opportunity and assemble an all-star team to tackle it.
The commercial real estate sector holds over $25 trillion in assets and the global insurance industry writes $1 trillion in annual commercial insurance premiums – and yet, where these two massive industries interact much of the work is manual. Each document, spec, plan, photograph, and inspection report lives in emails, cabinets and spreadsheets – all held by different people. No one in commercial real estate or insurance loves the current system, but it was built slowly over decades, just like the buildings it helps track.
I know this well. Much of my career has been at the intersection of technology and real estate. In 1999 I joined LoopNet, the largest online marketplace for commercial real estate, where I served as CEO. After an IPO and eventual acquisition of LoopNet, I turned to investing – with a special focus on companies working to transform the real estate industry (companies like Join, Mynd, Apartmentlist, VTS, Roofstock and Cape Analytics).
When I heard about the idea for Archipelago, I was already deeply familiar with the problem the company was attempting to solve. And in two years, Hemant and his team have made remarkable progress toward transforming how asset owners in the real estate space – particularly those with huge portfolios of institutional assets like Prologis - are interacting with the Property & Casualty (P&C) insurance markets.
The company has already signed some of the biggest names on both the asset and insurance side, demonstrating an eagerness for a solution. For asset owners, it is essential to have access to P&C markets to insure their billions worth of assets against flood, fire and other risks. And for insurers, better information leads to a better understanding of risk. Models are used to price risk, but they're only as good as the quality of data available. Unbelievably, in today’s technology centric, cloud-first world, information is still typically shared using a crude data tool invented in the 1980s (a spreadsheet) and a communications medium just as old (email).
Archipelago is changing that by moving the industry online onto a cloud based data, workflow and communications platform which aggregates deeper, more complete, more accurate, and more timely information about these assets. That information can then be shared in a controlled fashion with all the stakeholders in the ecosystem to drive better, more informed decisions in a vastly more efficient process.
Two huge markets, both of which can benefit from a digital transformation. A great team going after a big problem - exactly the kind of startup we at Canaan are excited to support.
Written by Rich Boyle
Board Director of Archipelago, is a General Partner at Canaan, an early-stage VC firm based in Silicon Valley, and was previously CEO of LoopNet.