According to reports, the next court hearing is scheduled for February 20th.
At the peak of its success, Vestoo had a valuation of a billion dollars. But the startup now confronts claims totalling billions due to the unearthing of purportedly fraudulent letters of credit valued at over $3.3 billion. This finding has resulted in the company’s collapse and the subsequent closure of its Bermuda office.
The insurtech raised $80 million in funding and established a marketplace for non-catastrophic (non-CAT) insurance-based risk transfer and investments. Vesttoo’s primary focus on providing insurance-linked investments to asset managers aimed to enhance liquidity in the life and property & casualty (P&C) insurance markets.
An AI-centred approach to risk
Vesttoo developed an AI-based risk modeling technology that structured, priced, and placed alternative reinsurance deals. By optimising the financial structure of transactions and considering factors such as accounting, legal, operational, and economic aspects, the insurtech sought to provide comprehensive risk transparency and performance monitoring, contributing to increased liquidity in the reinsurance ecosystem.
Vesttoo’s legal struggles
In 2021, Vesttoo joined forces with NVIDIA Inception, a programme supporting AI and data science technology startups. However, the same year brought forth allegations of fraud, leading to legal action against the company.
As part of the ongoing investigation into Vesttoo’s financial affairs, creditors have been granted permission to conduct a thorough examination of the company’s assets, liabilities, and overall financial condition. This includes discovery proceedings against Vesttoo’s US banker, Truist Financial Corporation.
