Startup Next Insurance Inc. today said it has raised a massive $83 million round of funding that seems to validate its model of providing customized insurance policies for small businesses.

The Series B round, led by Redpoint Ventures, brings Next Insurance’s total funding to $131 million since its founding in 2016. Other investors, including Nationwide Insurance, Munich Re, American Express Ventures, Ribbit Capital, TLV Ventures and Zeev Ventures, also participated in this new round.

The startup has built a niche for itself in what it says is an “underserved” insurance market for smaller businesses, which traditionally have had to rely on price comparison websites to work out the coverage they need and where to buy it. Next said this model is outdated and doesn’t always cover everything businesses need. So it customizes insurance packages for its clients instead, partnering with bigger insurance firms that underwrite its policies.

Next also serves private contractors, personal trainers and photographers, among other freelancers, with its insurance products. With Next, it’s possible to get purchase a customized insurance policy within a matter of minutes on its website, rather than waiting weeks when applying with a traditional insurer.

The company uses artificial intelligence-powered algorithms to help assess each applicant and come up with the right policy for each one. The company also offers a Facebook Messenger chatbot that can sell insurance policies and handle claims.

“We use AI in a few ways with varying levels of sophistication,” Next Chief Operating Officer Sofya Pogreb told SiliconANGLE.

For example, the company uses AI for user acquisition, Pogreb said, bringing in new small businesses for which its existing products might be a good fit. Next also uses AI to tailor its products and coverage for each customer and for things such as risk evaluation, risk-based pricing, claim assessments and decision-making.

“[This involves] validating the data provided by the applicant, supplementing it with additional third-party and online footprint data, and using these inputs to create a custom quote that reflects the risks unique to each business,” Pogreb explained.

With the new funding, Next plans to develop newer insurance products and improve its AI tech to streamline the applications and claims processes further. “Our goal is to become the one-stop shop for all small business insurance needs, no matter where they are,” said Next co-founder and Chief Executive Guy Goldstein.

The funding comes just weeks after Next secured national insurance carrier status in Delaware, Oklahoma, Arizona, North Carolina, Texas, New Mexico, Maryland and Utah. The new designation means Next is free to write policies independently of its partner insurance firms, giving it more freedom to set its own prices and conditions to match customer needs.

Image: Next Insurance/Twitter