TORONTO Feb 22 One of Canada's largest
insurers, Power Financial Corp, is investing in a
Toronto-based startup with global ambitions to automate key
segments of the insurance industry.
Collage, Canada's first cloud-based human resource and
benefits platform, said on Wednesday that it received C$5
million ($3.8 million) in seed financing from venture capital
Diagram is financed primarily by Portag3 Ventures, whose
exclusive backers are Power Financial Corp and some of its
subsidiaries, including insurer Great-West Life.
Collage is part of the emerging "insurtech" space within the
financial technology, or fintech, industry.
The company offers its software free and earns money through
commissions from insurance companies as a registered insurance
broker. It aims to simplify and modernize the "pen and paper"
human resources industry, making the process and benefits
accessible, particularly to small businesses.
The multibillion-dollar market is under-served and growing,
Diagram Chief Executive Officer Francois Lafortune said in an
"It's big enough in Canada to make it a substantial
business," he said, "but the real prize here is to go broader."
Formed last year, Collage is using Canada as a "proving
ground" to work directly with insurance companies to find new
ways to approach HR and benefits management, said CEO and
co-founder Elijah Moore.
"Instead of saying, 'Hey, you guys are old and stodgy, and
you move slow,' we're actually trying be cooperative," Moore
Collage plans to introduce insurance products not yet
available in Canada or the United States, and is eyeing growth
beyond Canada as early as this year.
One of its U.S. counterparts, Zenefits, was once a
high-flying startup that raised $500 million in financing in
2015. The company laid off 45 percent of its staff almost two
weeks ago and has faced insurance violations and
Moore and Lafortune say Collage is different, noting one of
the co-founders is a licensed expert and instructor in the
Diagram, publicly launched last month with the support of
dozens of entrepreneurs and senior executives, will work closely
with Collage to help it expand, using the fund's own expertise
Moore said Power Financial and Great-West Life were unique
among large financial institutions "in the way they're actively
trying to disrupt themselves." Insurance companies have
traditionally lagged in venture investing, he added.
($1 = 1.3137 Canadian dollars)
(Reporting by Solarina Ho; Editing by Lisa Von Ahn)