The seed financing round was led by New Enterprise Associates, Walkabout Ventures, and Altai Ventures. Credit: Pickadook / Shutterstock.com.

Insurtech startup Functional Finance has raised $8m in a seed financing round to further expand operational efficiency for the insurance industry.

New Enterprise Associates (NEA), Walkabout Ventures, and Altai Ventures led the seed financing round.

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The funding round also saw participation from various investors including C V Starr Insurance.

Established in 2021, Functional Finance merges and automates information as well as reports functions for insurance companies.

Apart from the seed capital, the company also secured $2m in SAFE notes for future equity investment.

Functional Finance intends to leverage the funds to expedite the development of products and marketing activities for optimising back-office processes for businesses in the insurance sector.

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Its technology could be incorporated into the corporate partners’ finance tech stack, thereby delivering billing/invoicing, collection of premiums, financing, reconciliation, processing of payables, reporting and linking back to the general ledger. 

The software platform also provides complete visibility at a policy or account level through automated integration.

Functional Finance CEO Rashmi Melgiri said: “At my last startup I realised firsthand that spreadsheets and emails are terribly inefficient, error-prone and costly ways for the insurance industry to manage their payables and receivables. 

“You can build fast-growing businesses and take payments online but reconciling that on the back end is often overlooked and deprioritised, leaving it to intensive manual labour. 

“There was a tremendous opportunity to create an automated technology solution that will make the industry move faster, and the experience should be more efficient and positive for clients and customers.”