Corvus Insurance has found a new nest.
Travelers Companies has reached a deal to pay $435 million to buy the Boston-based insurance-tech startup, which specializes in cybersecurity and is named after the genus of tool-making birds that includes crows and ravens.
The deal, which is expected to close in early 2024, originated out of a growing business relationship between the two companies. Travelers had reached an agreement with Corvus to sell cyber policies in Europe a year ago, using Corvus software to handle the underwriting, and recently broadened that partnership to include the US. (Corvus also works with other large insurers as well.) The executives at Travelers obviously liked what they saw, and decided to buy the company outright.
“This transaction accelerates our access to cutting-edge cyber capabilities that were on our strategic roadmap,” such as sophisticated underwriting algorithms and vulnerability scanning, Travelers chief executive Alan Schnitzer said in a statement.
Executives at both companies declined to comment beyond a press release Travelers issued on Friday morning.
Corvus employs about 250 people today, including fewer than 100 based out of its headquarters at 100 Summer St. The business was launched in 2017 by Mike Lloyd, a Harvard Business School grad, and veteran insurance executive Phil Edmundson, who had sold brokerage William Gallagher Associates two years earlier. Venture capitalist Jeff Bussgang, who teaches at HBS, introduced Lloyd and Edmundson. The thesis behind Corvus: use new ways of data-crunching to better predict problems and prevent them from happening, to “make the world safer” — a common refrain at the firm.
Edmundson last year handed over the CEO’s job to Madhu Tadikonda, who is based in New York, and became executive chairman as a result, while Lloyd remains chief operating officer.
Initially, the firm focused on various kinds of insurance, such as shipping and logistics. But as the company grew, it focused on its most successful business line, cybersecurity. The firm uses its technology to identify cyber vulnerabilities for policy holders and reduce their exposure. Over time, Corvus attracted interest from a number of venture capital investors, including Boston’s Bain Capital Ventures and .406 Ventures. As of 2021, Corvus had raised $147 million in venture investments.