Insuretech start-up CyberFortress has raised $3m in seed capital in a funding round co-led by Greycroft and LiveOak Venture Partners.

CyberFortress plans to use the proceeds to hire new staff for its product development team.

The capital will also be invested to roll out new product in the Texas market by early next year.

The insurtech firm, which was established last year, is currently developing a parametric, online revenue interruption policy for e-commerce companies.

The policy will insure e-commerce firms against the risk of downtime in case of any cyber events including internal errors, cyber attacks as well as third-party failure.

CyberFortress CEO Huw Edwards said: “The main cyber threat facing e-commerce companies is downtime. A DDoS attack, service provider outage, or internal error that takes down their website can be devastating to an e-commerce company.

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“If a small e-commerce company can’t collect revenue, they may not be able to make their next payroll. Our policy is laser-focused on solving this critical problem.”

In June, CyberFortress rolled out its Downtime Risk Assessment tool. Levergining proprietary data collection technology and machine learning methods, the tool evaluates possibility of downtime for a particular e-commerce company.

As per terms of the agreement, LiveOak founding partner Venu Shamapant will gain a seat to CyberFortress board.

Shamapant said: “At LiveOak, we tend to be entrepreneur-first investors. What caught our attention about CyberFortress is the experience of their team with small- and medium-sized businesses and e-commerce businesses.

“They have a deep understanding of the true pain points in that market segment. That, coupled with a very innovative solution got us excited about the opportunity to back this team in their efforts to revolutionize the cyber insurance industry.”