German startup Baobab Insurance, a provider of insurance against cyber and other digital risks, announced today a €12 million Series A financing round to advance their active risk mitigation platform.
The round was led by VC fund Viola FinTech and eCapital. Existing investors, Augmentum Fintech and Project A Ventures, and Baobab’s advisory board member Christof Mascher, a former member of the board of Allianz SE, also participated in the round.
Vincenz Klemm, Co-founder and CEO of Baobab Insurance said: “Phishing, CEO fraud, and ransomware have become a real threat to European companies, and AI is exacerbating the threat. Thanks to our AI-native underwriting process and integrated, active, and free risk management, we equip and empower insurance brokers with solutions that provide the best possible protection against these dynamic risks. The new capital will enable us to continue preventing millions in losses for our customers and expand into other European countries.”
Founded in 2021, Baobab Insurance is “Germany’s first integrated cyber insurance provider and risk mitigation provider”, operating as a Managing General Agent for digital risks. Its product portfolio includes cyber insurance, an e-crime insurance product and an IT liability policy for IT, software, technology, and telecommunications companies in Germany and Austria.
Baobab also offers risk-relevant services such as phishing simulations and awareness training – having helped prevent losses of over €10 million for its customers.
Prof Daniel Tsiddon, General Partner at Viola FinTech commented: “Global tension creates safe havens for cyber criminals. With tensions on European borders increasing, businesses become more vulnerable to cyberattacks. Building on a super novel approach at the right time in history, Baobab offers the much-needed protection to European companies.”
The company plans to significantly grow its team, strengthen its position in Germany and Austria, and further expand and deepen its product range for commercial customers. Baobab plans to enter additional EU markets within the next 12 months.
As attackers increasingly leverage generative AI tools, cyberattacks are becoming more sophisticated. According to Statista, global losses from cybercrime alone are expected to increase to €12 trillion by 2027, with the EU projected to bear a quarter of that cost. According to a 2024 economic study by Germany’s domestic intelligence agency (BfV), the financial impact of cyber incidents rose by 29% over the past year, generating a significant negative effect on the German economy.
Willi Mannheims, Managing Partner at eCAPITAL said: “Cyber risks cannot be handled lightly – the damage is already far too great for that. Baobab Insurance has a clear advantage: the team is committed to prevention and proactive risk management. The company’s approach has prevented losses amounting to over €10 million in the last three years alone, which speaks for itself. This determination is precisely what the market now needs to effectively counter the rapidly increasing threat.”
Backed by proprietary underwriting and continuous monitoring technology for its portfolio companies, Baobab takes on the challenge of shielding its clients’ exposure to all aspects of digital risks. This approach has reportedly enabled Baobab to provide better protection to its clients and achieve a loss ratio significantly below the market average, attracting insurers such as Zurich, ERGO, Liberty Specialty Markets, Tokio Marine Kiln, Talbot (part of AIG), and Argenta (part of Hannover Re) as risk carriers.
Christof Mascher, Advisory Board Member at Baobab Insurance and former member of the board of Allianz SE added: “The insurance industry is facing profound change, driven by technological disruption and new threats such as cybercrime. Baobab provides a technologically and actuarially compelling response to this. I am particularly impressed by the combination of data-driven underwriting, a scalable technology platform, and a focus on technical risks.”