The new investment will expedite Rainbow’s expansion into new business segments. Credit: RomanR/Shutterstock.

Specialist managing general underwriter (MGU) Rainbow, focused on small business insurance, has secured $8m in Series A funding, led by Zigg Capital.  

The fresh infusion increases US-based Rainbow’s total capital to $20m and will expedite its expansion into new business segments.  

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Rainbow launched a platform for the small commercial insurance market, initially offering an admitted business owner’s policy (BOP) for the restaurant sector.  

This programme is operational in 24 states and is set to extend into additional territories including New York in the coming months. 

Rainbow’s risk selection methodology is supported by its proprietary “continuous underwriting” software.  

This in-house risk monitoring tool serves as a ‘workbench’, allowing Rainbow to manage the risks small businesses encounter. 

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The company’s technology platform is designed to streamline the quote-to-bind process for agents and brokers.  

Rainbow co-founder and CEO Bobby Touran said: “As we continue to prove our thesis for scalable, software-driven-underwriting across a growing portfolio of specialised insurance programmes, we are thrilled to be deepening our partnership with Zigg, a firm that shares our vision for a differentiated approach to profitable insurance underwriting with endless potential.  

“This new capital will allow us to accelerate our expansion into additional verticals in service of growing demand from our agent and distribution partners, all while continuing to innovate our proprietary technology and attracting the best talent to our team.” 

Rainbow was established in 2022. 

In January 2024, it secured $12m in a seed funding round, with contributions from Altai Ventures, Arch Capital Group, Buckley Ventures, Caffeinated Capital, 8VC, Habitat Partners and Zigg Capital.