In an industry where inspiration can strike from the most unexpected sources, the genesis of Authentic Insurance offers a fascinating case study. Cole Riccardi, the CEO of Authentic Insurance, found his entrepreneurial spark from an unlikely muse: thoroughbred horse trainers.
Thoroughbreds, powerful athletes weighing over 1,000 pounds, pose significant risks to their caretakers. When these majestic animals become unruly, they can cause severe injuries, leading to substantial workers’ compensation claims. In response to this challenge, a unique insurance program named Big Stakes was created. This program incentivized New York-based trainers to adhere to stringent safety protocols by sharing the unused portion of insurance funds, thus transforming risk management in the equestrian world.
Inspired by this innovative model, Riccardi established Authentic Insurance in 2022. Though the company is relatively new, with only six months of market presence, it has swiftly gained traction by adapting the captive insurance model to the software industry. Authentic Insurance handles the logistics, allowing software providers to offer bespoke insurance programs, mirroring the success of Big Stakes.
One notable partnership is with Mindbody, a prominent scheduling and business management platform serving over 45,000 fitness and beauty studios across the United States, including well-known names like Orangetheory, Barre3, and Drybar. Traditionally, each of these locations would need to secure insurance independently from major carriers. Authentic Insurance changes this by enabling studios to purchase insurance directly through the Mindbody platform, fostering convenience and trust.
“Why should you need to purchase insurance through Liberty Mutual or State Farm?” Riccardi posed in an interview with Fortune. “We should have programs with other platforms that we know and trust.”
Authentic Insurance’s business model is compelling. The company splits initial fees 50/50 with its software partners. After covering all claims, 80% of any remaining funds are returned to the software companies, which can either retain the funds or distribute them back to the individual businesses. Authentic retains the final 20%, ensuring a win-win for all involved.
Building on a $5.5 million seed round in 2022, Authentic has now secured $11 million in Series A funding. This round was led by New York-based venture capital firm FirstMark Capital, with contributions from Slow Ventures, Altai Ventures, MGV, Upper90, and Commerce Ventures.
FirstMark partner Adam Nelson lauded Riccardi’s unique skill set, saying, “Cole [Riccardi] is such a unique blend of product visionary, deep industry expertise, and analytical capital markets know-how that let him get from zero to one here, which surprised everyone we talked to in the market.”
Riccardi’s background is as dynamic as his business acumen. A New Jersey native, now residing in New York, he met co-founder Kyle Babirad, an expert in insurance pricing, during their tenure in the insurance sector. Riccardi previously spent five years as an investor at Aquiline Capital Partners, where he often encountered insurance tech firms utilizing Babirad’s consultancy.
Since January, Authentic has doubled its team to 16 and plans to continue expanding, focusing on recruiting more engineers to develop new products. The fresh funding will also support the introduction of additional offerings, such as workers’ compensation, health insurance products, and benefits.
Beyond Mindbody, Authentic collaborates with Restaurant365, a restaurant management software; theCut, a barber booking app; and PushPress, a gym operating system. To date, the company has sold over 100 policies through its partners and anticipates exceeding 1,000 policies by summer’s end.
While Riccardi acknowledges the inspiration drawn from horse trainers and Big Stakes, his focus remains firmly on the software sector. As Authentic Insurance continues to grow and innovate, it is clear that there is room for multiple victors in this race.
For more updates on Authentic Insurance and other groundbreaking startups, stay tuned to ImpactWealth.org.
