Counterpart, a Covina-based insurance tech company, raised $50 million in series C funding, bringing the company’s total funding to $106 million, the company announced Tuesday.

The fresh funding round was led by Valor Equity Partners, with additional participation from longtime investor Vy Capital.

Founded in 2019, Counterpart provides management liability insurance to small businesses, and its competitive edge comes from the proprietary data collected on any given company’s financial data, regulatory compliance needs and employee culture. That data is put through an algorithm that determines a company’s risk.

Counterpoint partners with brokers to cover those private companies, often which have less than 250 employees and less than $250 million in annual revenue.

Companies like Counterpart are becoming more relevant as small businesses weigh the risks of adopting generative artificial intelligence. Many small businesses are “currently struggling to make ends meet,” as they’ve dealt with the lingering effects of the Covid-19 pandemic, supply constraints, inflation and regulatory challenges, said Tanner Hackett, chief executive of Counterpart.

“Now they’re at the precipice of one of the most significant technological revolutions of our lifetime and they’re looking at two options: trying to embrace the technology and embed it into their systems or potentially face obsolescence,” said Hackett. “Both of them are really challenging pills to swallow because they both invite a meaningful amount of risk, and so we see ourselves as a business that has helped them.”

Overlooked piece of insurtech

Management liability insurance protects companies from harassment or mismanagement cases brought about by people in the company. Employment practices insurance, for example, shields companies that might be named in a lawsuit by a current or former staff member. Directors’ and officers’ insurance safeguards company executives that could be sued if their decisions lead to consequences for the organization. Fiduciary insurance defends companies that change their employee benefit plans.

While other well-known venture-backed insurance tech startups like Lemonade and Root Insurance primarily offer individuals insurance – whether to protect their homes, automobiles or pets – Counterpart is one of the few companies in the commercial insurance space.

According to PitchBook, commercial insurance companies received only 11% of insurtech funding in the second quarter of 2025, and deal count for the first half of the year saw a 50% decrease trailing twelve months. Year-over-year deal count shrank by 30% for the segment.

But the industry is seeing a swell of revived interest thanks to AI.

“Counterpart saw the AI inflection coming years before anyone else and understood that the right technology, in the hands of the right insurance experts, could transform the experience for every party in the transaction,” John Shulkin, a partner at Valor Equity Partners, said in a statement.

The AI problem

As AI proliferates all sectors, the insurtech sector has slowly begun to adopt generative AI to automate claims processing. According to a research report from insurtech platform Simplifai published in April, 99% of insurers have some sort of generative AI initiative, but 58% have yet to deploy the technology.

Fifteen percent of companies that use generative AI saw a negligible impact on the company’s returns, preventing these projects from being broadly deployed outside of their pilot phases.

“Finance teams see pilot costs but struggle to measure benefits,” Artem Gonchakov, chief executive of Simplifai, said in the report. “‘We saved 30 minutes per claim’ doesn’t automatically translate to headcount reduction or margin improvement. Without attribution models that tie AI to profit and loss outcomes, pilots stay pilots.”

Hackett said Counterpart exists in part because other insurance companies are slow to adopt AI. The company works with carriers to help them understand its AI infrastructure.

“We were investing tens of billions of dollars into this data infrastructure with the general expectation that this data, ultimately, is going to help us underwrite the next business better,” Hackett said. “So that collection of rich data that these businesses are providing, plus leveraging APIs and other tools to get more data about the business, has built one of the richest repositories of data about small businesses in the industry.”

Funding will take Counterpart to profitability, according to Hackett. The fresh funds will go towards launching new insurance products for niche circumstances, building industry-specific platforms and expanding its resources to manage claims and risks. Counterpart achieved record growth in 2025. Since it was founded in 2019, it has written more than 35,000 policies.