Edition #129

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	Forwarded this email? Subscribe here for more ✨ Heartcore Insights Edition #129 Heartcore Capital Aug 26   READ IN APP   Hi there, Hope you all had a lovely summer! Welcome to the 129th edition of Heartcore Insights, curated with 🖤 by the Heartcore Team. If you missed the past newsletters, you can catch up here. Now, let’s dive in! Prepared Mind – Agentic and Applied AI Who Pays When the AI Agent Screws Up? When a lawyer misses a filing deadline or a surgeon makes a mistake in the operating room, malpractice insurance covers it. When a sales agent overpromises or misrepresents a product and the client sues, errors & omissions (E&O) insurance steps in. For decades, we’ve built systems that allow human error to be priced, pooled, and transferred. But what happens when your AI travel agent books Paris, Texas instead of France, or your AI B2B sales agent tanks a deal? Who bears the risk – you, the company that deployed it, the vendor who built it, or some future insurer underwriting AI agents? As AI agents begin making consequential decisions, the question stops being hypothetical. History shows that humans have long outsourced their errors to underwriters and when software arrived, insurers tried to adapt. Cyber insurance became a huge category, but bugs, outages and ambiguous “software failures” were harder to underwrite, in part because insurers dislike risks without reliable loss data. So where does AI sit, as it now straddles both human-like judgment and opaque code. Several structures are emerging. Direct liability policies would make vendors responsible for damage their AI causes, similar to product liability. Usage-based models would let companies buy protection in proportion to their reliance on agents, much like cyber. Outcome-based or parametric designs could pay out when a predefined threshold is crossed, such as an AI trader exceeding loss limits, avoiding messy disputes about causation. The toughest challenge remains the “black box”: insurers struggle to underwrite systems they cannot explain, so some suggest focusing on statistical outcomes instead of inner workings. Companies are experimenting at the edges and appetite from clients. AIUC is pushing to set standards for certification and insurance of AI Agents. But so are incumbents. Giants like Munich Re and Swiss Re publish position papers and pilot products, while brokers such as Marsh advise clients on liability frameworks. Some MGAs already offer E&O extensions for AI in healthcare, and academic proposals suggest “Critical AI Occurrence” insurance modelled on nuclear liability. It’s still early days, but trends are emerging. One should consider though, that if software is the proxy, the “insurance for mistakes” category is meaningful but not gigantic. Stand-alone technology E&O premiums total roughly $2-3B globally, while the broader cyber plus tech E&O market is closer to $17B and growing. That is not auto or health scale, but it shows insurers already monetise digital error. The open question is whether AI risk grows as an add-on to cyber or becomes its own line of business and premiums. The bullish view is obvious: AI will be everywhere, mistakes accumulate, risks become more quantifiable and AI liability could become a multi-billion-dollar necessity, just as it did with cyber. The flip-side is that software insurance precedence (without cyber) did not lead to a huge sector itself. Additionally, models are opaque, loss data thin and accountability unclear. Alternatively, regulators might simply mandate the decision (especially in Europe), potentially forcing vendors to take responsibility instead of leaving it to markets. For now, AI agent insurance remains closer to thought experiment than product line. But the first high-profile AI loss will likely accelerate the timeline, leading to the creation of standardised risk frameworks; regulatory clarity on who pays; and a few years of claim history. Insurance for Agentic AI might be the necessary unlock for large scale enterprise adoption, or a cautious add-on for the skeptics. Either way, we would love to speak with any and all founders working at the inception of this space or similar re-inventions of legacy businesses in an agentic world. ~ Bodi Tent, Associate, Heartcore Capital Ignore Previous Directions 5: hardware has changed, Ignore Previous Directions Situational Awareness: A One-Year Retrospective, Nathan Delisle Where do Tech Returns Come From?, Eric Flaningam levered beta is all you need, Ethan Ding The Myth of Proprietary Data, Laurin Class Building Abstract – Episode 435, Ramit Naimi 🇪🇺 Notable European early-stage rounds paddy, Germany-based ed-tech startup, raises €1M with HTGF - link TopK, Czech Republic-based developer of AI-native search engine for enterprises, raises $5.5M with Earlybird - link Due, UK-based borderless payment startup, raises $7.3M with Speedinvest - link Skynopy 🖤, France-based space-tech startup building real-time, high-speed satellite ground network, raises €15M with Alven - link Phoebe, UK-based immune system for software failure, raises €17M with GV/Cherry - link Lovable, Sweden based AI-powered no-code app development platform, raises $200M with Accel - link 🇺🇸 Notable US early-stage rounds North Pole Security, a cybersecurity startup focused on macOS protection, raises $4M with A16Z - link Paradigm, a startup developing agentic spreadsheet, raises $5M with General Catalyst - link Ostra Security, a provider of fully managed cybersecurity solution, raises $9.5M with General Catalyst - link Continua, a startup improving social AI with dynamic conversations, raises $8M with GV - link Dirac, a builder of the first automated work instruction platform, raises $10.7 with Founders Fund/Coatue - link Legion, a cybersecurity startup developing AI-powered security operations centres for detecting browser-based threats, raises $38M with Accel - link 🔭 Notable later stage rounds Anaconda, a US-based provider of open-source Python software for data science and AI, raises $150M with Insight Partners - link Strand Therapeutics, a US-based biotech developing programmable mRNA therapeutic cancer drugs, raises $153M with Kinnevik - link Ambience Healthcare, a US-based ambient AI platform for documentation, coding and clinical documentation integrity, raises $243M with A16Z - link EliseAI, a US-based enterprise software maker, raises $250M with A16Z - link Cognition, a US-based AI code-generation startup, raises $500M with Founders Fund - link Ramp, a US-based financial operations platform, raises $500M with ICONIQ - link 🖤 Heartcore News We are hiring TWO student assistants in Copenhagen – a Finance Assistant and a Legal Assistant. Know someone who’d be a great fit? Pass it on! 🫵🏻 Congrats to Skynopy 🖤 on raising a €15M Seed round led by Alven with participation from Expansion, Omnes, SpaceFounders and us. 🌟 We partnered with Hyperbeat 🖤, the native yield layer of Hyperliquid, in their $5.2M Seed round led by Ether.fi Ventures and Electric Capital. 🚀 Congrats to Fora Travel 🖤 on acquiring award-winning AI startup Legends! 👏🏼 Kudos to SOUNDBOKS 🖤 on launching Lightboks, a sound-reactive party light that takes the mood to new heights! 🪩 Thank you for being a loyal subscriber of our monthly Insights. Please feel free to share this newsletter with anyone you’d think would appreciate it! Share Heartcore Insights   Restack   © 2025 Heartcore Frederiksgade 7, 1265 Copenhagen, Denmark Unsubscribe