CyberCube raises $50m for growth, with HSCM participating again

Cyber risk analytics and quantification software specialist CyberCube has announced a successful raise of $50 million in capital to fund growth of the business, with reinsurance investment specialist Hudson Structured Capital Management (HSCM) participating again.

It takes CyberCube’s total capital raised to-date to more than $100 million.

The new $50 million addition is being termed a growth capital injection from investment funds managed by Morgan Stanley Tactical Value (Morgan Stanley).

But, importantly, there was continued participation from all existing CyberCube investors: Forgepoint Capital, Hudson Structured Capital Management (Bermuda) Ltd., MTech Capital, and key investors from Stone Point Capital.

In addition, the former CEO of Verisk Scott G. Stephenson, has also participated in the financing and will join the CyberCube board as a director.

The new funding will be channeled to fuel the commercial development of CyberCube’s models and analytical solutions to quantify cyber risk, while also accelerating its go-to-market expansion in the global insurance, reinsurance and broking industry.

“This is an exciting milestone in our mission to empower modern industry and society with world-leading cyber risk analytics so everyone can make better decisions,” explained Pascal Millaire, CEO of CyberCube.

“In Morgan Stanley, we’ve found a tremendously supportive partner who recognizes the growing significance of cyber risk to the global economy and stands ready to support CyberCube as our business matures from an early market leader to a critical part of the analytics infrastructure in what is becoming one of the largest lines of P&C insurance globally.”

Pedro Teixeira, Co-Head of Morgan Stanley Tactical Value and Managing Director at Morgan Stanley, added, “CyberCube is a business that’s drawn great interest from the investment community. Its role in the insurance markets and the wider economy has been recognized as pivotal by industry participants. It presents both a strong investment opportunity and the ability for Morgan Stanley to play a positive role in the ongoing mitigation of global cyber threats.”

Michael Millette, Co-Founder and Managing Partner at HSCM Bermuda and CyberCube board member, also said, “CyberCube has built a market-leading position in a pivotal role in the cyber insurance value chain. The quantification of cyber risk through robust modeling will allow industry participants to predict risk levels and provide useful pricing information. We are delighted to continue our support of CyberCube in its mission to deliver data-driven cyber risk analytics built for the insurance industry.”

HSCM Bermuda had previously led a $35 million Series B capital raise for CyberCube back at the end of 2019 and also upped its commitment to the company earlier in 2022 as well.

Don Dixon, Co-Founder and Managing Director at Forgepoint and Chairman of the CyberCube board, commented, “The transfer of cyber risk to the insurance markets is fast becoming ubiquitous and vital for holistic risk management across sectors. Forgepoint is taking a leadership position in supporting collaboration between the insurance and cyber security industries. Our continued support of CyberCube is a key part of that strategy and we are thrilled for the company’s next chapter of growth.”

Scott G. Stephenson also stated, “Cyber risk management is one of the biggest threats facing businesses today and one of the greatest growth opportunities for the insurance sector. A key to unlocking this potential is the development of robust analytics tools to assist risk decision-making. I’m excited to support CyberCube given the tremendous opportunity the company has to drive value for businesses, insurance institutions, and for society in the decades to come.”

Cyber risk continues to be seen as a significant opportunity for the insurance-linked securities (ILS) sector.

But as investors remain reticent about backing a risk they lack understanding of, it is likely to prove to be a category where risk models and analytical tools prove just as essential as they did for the original development of the ILS market, when more advanced risk models helped deliver a better way to understand and price risk.

Risk models will eventually deliver the ability for ILS managers and investors to wrap sufficient understanding around the cyber peril and so give them confidence to deploy capital against it.