The Secret Life of an InsurTech CEO Leading a $5B Cybersecurity MGA

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By Russ Banham

Carrier Management magazine

In the early aughts, when Shardul Shah first met technology entrepreneur Joshua Motta as undergraduates at the University of Chicago, Motta seemed unusually reserved.

“I found it challenging to meet his intellect,” said Shah, a partner at venture capital firm Index Ventures. “As a consequence, [our discussions] were more about me than him. I really couldn’t get him loose.”

Once the young men came to know each other better, Motta opened up and Shah realized why it was so difficult to loosen him up. Unlike other students at the prestigious university, Motta worked as a CIA officer. He was effectively obliged to be reticent. “I realized much later how that eventually played to his advantage, being in the intelligence community,” Shah said.

As the cofounder and CEO of Coalition, Motta is upending the traditional approach to cyber risk insurance. The managing general agency combines ongoing cyber risk assessments with cyber insurance for small and medium-size businesses. The company offers a novel way for customers to prevent, respond and insure cyber risks via an all-in-one platform.

Since the launch of Coalition in 2017, it has become a magnet for venture capital. In June, the company raised $250 million on top of $500 million raised through September 2021, elevating its present valuation to $5 billion. In July 2022, Coalition announced a nearly 200 percent increase in year-over-year revenue, writing $775 million in gross premiums.

Motta’s background appears predestined to culminate in Coalition’s creation. At the age of 15, a time when many teenage boys are earning a few bucks flinging newspapers or cutting neighbors’ lawns, he was an employee developing software in the Redmond, Wash., headquarters of Microsoft. He remains the youngest hire in the tech giant’s history.

Motta’s extraordinary tale begins even earlier than his Microsoft stint. In the late-1990s, as a 12-year-old in Olathe, Kan., on the Kansas-Missouri border, he and a friend from junior high school had a business developing websites for small businesses like local realtors just beginning to grasp the advertising and marketing value of the World Wide Web. The dotcom era was in its bubble-building phase then, thanks to the booming use and adoption of the Internet.

“There was this web-hosting service called GeoCities that people could use to create and publish websites for free,” Motta explained in a recent Zoom interview. “I started building them for myself, for the fun of it. And then I realized I could turn what I was doing into a business.”

Although the enterprise was successful, Motta had another innovative business idea in mind. “Like most lazy teenagers, I didn’t want to do the same thing over and over again, so I wrote software that would make it easy for businesses to make their own websites on the Internet,” he said.

The partners called their new venture Net Avenue. Serendipitously, a customer called was featured on Microsoft’s website in a small business success story. The article noted that a 14-year-old boy, using Microsoft tools, had created the company’s e-commerce platform. “The owner subsequently put Microsoft in touch with us to write an article about our business,” Motta said.

Soon after the article on Net Avenue was published, Jeff Raikes, an early Microsoft employee who later cofounded the Bill and Melinda Gates Foundation, read it and was impressed and intrigued. After all, Bill Gates wrote his first software program at the age of 13. Raikes had a similar Midwestern upbringing and emailed Motta to set up a phone call.

“I was pretty naïve to realize who I was talking with, which was good in the sense that we had this great conversation,” said Motta. “It ended with Jeff asking if I wanted to come work for Microsoft over summer vacation. I said ‘yes, of course.’”

The trickier part was asking his parents for permission.

Microsoft’s Wonder Boy

Fortunately, Motta’s family had long nurtured his entrepreneurial and intellectual nature. Two uncles had created businesses, and his maternal grandparents were both academics. But his parents, who worked full-time jobs and had two other kids to rear, could not grant permission. By chance, Motta’s grandmother had recently retired from teaching at the University of Missouri and volunteered to move to Redmond with him.

When the 15-year-old software engineer arrived at Building 18 at the sprawling office campus, he spied a series of large wall posters featuring a photo of him and the words, “Microsoft’s Wonder Boy.” He loved it. “My coworkers were amazing and such fun, with a really great sense of humor that involved embarrassing me, which just made me like them more,” he said.

Motta worked on a team led by Raikes on the development of InfoWeb, a knowledge-based delivery tool. He was given free soft drinks and allowed to play video games, including an early version of Microsoft’s Age of Empires, the first in a game series that continues to the present time. “As the only teenager in the building, I got to test the games out,” he said.

He imagined his future the way all teenagers do, immoderately. “I had some vision of dropping out and working for the rest of my life at Microsoft, but coming from a family of academics, I knew I had to return to Olathe and high school,” he said.

Once home, his reputation preceded him. Two Fortune 500 companies with a local presence—telecom giant Sprint (subsequently acquired by T-Mobile) and multinational conglomerate Honeywell International—offered him part-time software writing jobs. “I worked three hours a day, was paid and also got school credit,” he said.

Spy vs. Spy

After graduating high school, Motta entered the University of Chicago, where he caught the attention of a recruiter at a career fair. A few weeks later, a package arrived in the mail. Inside was a job offer from the Central Intelligence Agency. The letter said, “Welcome to the CIA.” Motta was intrigued. “To be completely honest, I’m somewhat surprised that I decided to pursue the opportunity,” he said.

On closer inspection of the letter, it was apparent the job offer was conditional. Motta would need to pass a battery of polygraph tests and psychological exams. The agency also would need to interview his teachers, former employers and neighbors. He made it through this gauntlet and received top secret clearance.

“I worked full-time during summer months and school breaks in the agency’s information operations group at CIA headquarters in Langley, an employee like everybody else,” he said. “Our group’s role was to advance the core mission of the CIA during the war on terrorism, as I joined the agency in 2002 right after 9/11.”

Motta’s job was to collect and evaluate intelligence information pertaining to national security. Given his technological background, these tasks involved the use of computational cybersecurity intelligence techniques, a term describing cyber warfare.

“When people think about information warfare, they imagine sabotaging train stations and blowing up the grid, but the other part is the propaganda, the need to control the narrative and sow discontent,” he said. “Wars are about winning the hearts and minds of people.”

Motta enjoyed his time at the agency. He struck up a friendship with then-CIA Director George Tenet, whom he considers a mentor. Asked why he didn’t become a career agency man, he replied, “I was a victim of my age. To advance into the agency’s Directorate of Operations, the clandestine service trainee program every agent aspires to join, you need to be 25—and I was 21 and about to graduate college.”

Rather than put in another four years at the CIA, he cast his net wide for other job opportunities.

Old Friends, New Friends

In 2006, Goldman Sachs hired Motta in its London, England, office, in investment banking. He left the firm the following year to work in private equity at Francisco Partners, a San Francisco-based investment firm focused on technology companies. Then, in 2010, as a small tech startup in the city attracted attention, Motta joined the company, Cloudflare, at the behest of its CEO, as employee No. 20.

“Cloudflare had an audacious vision to rebuild the Net to make it faster and safer,” he said. “The company was on track to become one of the world’s largest content delivery and security networks, which it eventually became. A staggering percentage of Internet traffic travels through it.”

Motta was the head of special projects at Cloudflare, the work renewing his appreciation for solving big problems. Also revived was his friendship with Shah. In 2008, Shah joined Index Ventures with a focus on network security, cloud infrastructure and enterprise software. Regrettably, the venture capital firm passed on investing in Cloudflare “three or four times,” Shah confided. “I learned a lesson never to underestimate Joshua.”

By 2015, the college alums were both married and living in the San Francisco Bay Area. The couples took vacations together, kayaking the Russian River on the Sonoma Coast. Motta “had changed,” said Shah, attributing his friend’s more relaxed and open demeanor to his wife Gwyneth Jones, who worked with Motta at Cloudflare as a team coordinator. “I knew I wanted to someday be in business with Joshua. He was an entrepreneur I could trust, as I knew his character and emotional intelligence.”

In March 2017, Motta launched Coalition with John Hering, founder of cloud security firm Lookout. In a blog that December, he wrote that both he and Hering had spent a considerable amount of their careers building leading cybersecurity companies, concluding that “nothing is or will ever be 100 percent secure.”

The problem with insuring cyber risks was the conventional approach, which relied on transferring the exposures to insurance carriers ill-equipped to prevent a cyber attack. “Our long-term plan is to democratize access to the technology and services needed to prevent loss in the first place, and to mitigate and recover from it when it occurs,” Motta wrote.

Shah now had another chance for Index Ventures to invest in Motta’s entrepreneurship. “I wasn’t about to come just shy of insulting Joshua’s intelligence again,” he said. “When he engaged me in the subject of Coalition, even before I fully understood what it was, I knew I would support it.”

Coalition represents the firm’s largest initial investment. It could have been even larger, Shah said. “Joshua and I went for a walk in the middle of the pandemic, when he said he would be meeting other investors to review all options, which is the right thing to do, of course. He had higher offers, as it turned out. He could have attempted to get a better deal out of us, but he didn’t. We shook hands and since then, we’ve been investors.”

A Differentiating Value Proposition

Motta’s inspiration in forming Coalition was the idea that cybersecurity is not a technology problem; it’s a risk management problem, he said. “I could see the circularity of companies buying more and more technology to fix a problem that will never be fixed. The risk can be mitigated but never eliminated. It was an epiphany.”

He intuitively grasped that combining cyber threat monitoring with cyber insurance was a differentiating value proposition, particularly for small and medium-size businesses.

“An insurance broker would need a PhD in cybersecurity and be prepared to do two weeks of work to place insurance for a small business, which is simply not a profitable endeavor,” he explained. “What they do instead is turn it into a 60-second process to get a quote. The insurance then sits there on a shelf collecting dust until something bad happens that triggers a claim.”

By contrast, Coalition offers what the company calls “active insurance,” as coverage is complemented by ongoing cyber risk assessments. “For every policyholder,” said Shawn Ram, Coalition’s third employee and head of insurance, “we go out and set up the scans that give us a profile view of their security. We then actively monitor threats and notify the company that something is problematic.”

Ram, a former managing director and head of technology and cyber at insurance brokers Crystal & Company and Aon Risk Solutions, pointed out that most insurance companies outsource cyber threat monitoring to a third-party incident response team.

“We do it all in-house, with an eye toward solving a claim by getting the adversary out,” he said. “It enables us to create a feedback loop in insurance, where we continually collect data from the underwriting process and use this information to become better underwriters. This is a big difference from traditional insurance where you make an initial assessment of the risk that you charge for and then don’t think about the customer again until a claim is filed or the policy is up for renewal.”

Although Coalition is fundamentally an MGA, Ram said the company absorbs risk like an insurance company through a wholly owned captive, a “skin in the game” decision further distinguishing its value. This differentiating strategy has not gone unnoticed, given the veritable parade of investors in Coalition like Index Ventures, Allianz X, Valor Equity Partners, Kinetic Partners, Durable Capital, T. Rowe Price Associates Inc., Whale Rock Capital, General Atlantic, Ribbit Capital, Vy Capital and Valor Equity Partners.

Down the line, Motta projects an upward market trajectory for Coalition from its present focus on small and medium-size businesses. “To disrupt a market, I learned from Harvard Business School Professor Clay Christiansen [that] you venture into the low end, often the most underserved segment, and then start to move up and attack the stratum above,” he said. Motta met Christiansen during his time at Cloudflare.

That stratum is the Fortune 1000, the high-end cyber insurance market served predominantly by large insurers like Chubb and AIG. Asked if these carriers are his primary competition, Motta paused and then replied, “Our biggest competitor is ignorance, the organizations out there that don’t realize how critical it is for them to purchase cyber insurance.”

His friends and colleagues see bright vistas ahead for Coalition and its CEO. “Joshua has this relentless desire or need for excellence, which I find admirable,” said Ram. “Given the recent contraction in the cyber insurance markets, following a spate of highly publicized and expensive ransomware attacks, his timing is commendable.”

Shah said his friend remains “as incredibly intelligent and emotionally connected as when we met. He has very high standards [but] is not the type of leader dissuaded when someone makes a mistake, as long as an effort is put forth to find a path forward. He takes this view toward his own decisions.”

Everything Motta had learned over the years—his budding entrepreneurship as a pre-teen, the summer of fun as a Microsoft software engineer, the four years gathering intelligence in the war against cyberterrorism, his stints as an investment banker and his leadership of special projects at Cloudflare—are threads woven into Coalition. Although no longer a “boy wonder,” his life and work continue to amaze.

Russ Banham is a Pulitzer Prize-nominated business journalist and author of 28 books.

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