There are pros and cons to raising startup investment early.
The ability to hire talent quickly, and comfort of a lengthy runway, is offset by dilution of your holding in the business; while not raising at all can put the brakes on growth.
Tapoly CEO Janthana Kaenprakhamroy remains in two minds about her decision to limit her first raise to £250,000 after founding the business with Sam Hopkins in London in 2016.
“I used to regret not raising enough money from the beginning. But, thinking about it now, it wasn’t really a mistake because it allowed us to be independent,” she tells TechBlast.
“There are pros and cons: when we made this decision we didn’t envisage a hard market and certainly not the COVID-19 pandemic, which has perpetuated the hard market to the next level!
“If I had a crystal ball I probably would have raised more money upfront so that I could have more runway to build our business in this difficult market that we are in.”
That seed funding, from Startup Funding Club (SFC) and the London Co-Investment Fund (LCIF), was followed by investment from InsurTech Hub Munich and Plug and Play.
Kaenprakhamroy is now raising a £2 million round of funding, with 60% already committed. Any interested investors should contact the company at [email protected]
“We are looking for strategic investors who we can add value, whether by way of technology, expertise or products, to join our cap table,” she says. “I think most startups will have to go through this phase where they need external investor money to build and support the growth of the business.
“However, this stage should only be temporary, once startups gain some momentum and break even, they will have less need to raise money and can instead focus more resources on building and growing the business.”
It provides tailored business insurance for SMEs and freelancers in the gig economy alongside a SaaS API solution to connect insurers with their distribution partners to aid communication, data transfer and automation.
Kaenprakhamroy grew up in an agricultural family in Thailand “where education was difficult to access and women were not particularly encouraged into entrepreneurship”. She would go on to finish her schooling in Sweden before studying at university in London and working in investment banking before following her dream of building a business.
Listed by Forbes as No.6 of the Top 100 Women Founders to Watch, she has had to fight for success in a male-dominated industry.
“I constantly see just how few women there are in our offices and boardrooms,” she says. “I am thankful that I never felt I should avoid becoming an InsurTech entrepreneur because of my gender. This is a mindset that I want to instil in the next generation of female tech leaders.
“However, structural changes still need to be made to break down the barriers and diversify the workforce, including increasing the amount of funding available, more mentoring opportunities and better access to education and training.”
Tapoly is expanding into North America and emerging markets among its growth plans for the next 12 months.
“We are in the process of launching the first reinsurance platform for cannabis insurance, and an insurance platform for construction workers in the Green Energy space,” says Kaenprakhamroy. “These projects are estimated to be worth over $1.6bn in market value.
“We have teamed up with elite partners in these regions for rapid growth and local knowledge. Tapoly’s platform will bring both operational efficiency and scalability allowing our partners to gain a competitive advantage and economies of scale.”