Toronto-based AI startup General Magic has closed a $7.2 million USD seed funding round to transform customer communication in the insurance industry. Led by Radical Ventures, the investment will fuel AI agents designed to automate interactions across the insurance lifecycle. This brings the company's total capital to $8.4 million USD, positioning it to tackle long-standing operational inefficiencies.
Addressing Industry Inefficiencies
The insurance sector is often hampered by manual communication like phone calls and emails, leading to high operational costs and customer delays. This coordination overhead for brokers and carriers results in a fragmented experience during critical moments like quoting and claims. Such inefficiencies strain resources and contribute to lower customer retention rates in a competitive market.
General Magic addresses these challenges with AI agents that handle routine customer interactions via text message. These agents manage tasks like answering questions, collecting documents, and providing timely follow-ups, reducing the burden on human teams. The company reports its technology can cut call volumes by 30 percent, saving hundreds of hours monthly.
Technology and Integration
At its core is "Cell," a proactive AI agent that integrates directly with existing legacy systems, including broker management platforms and CRMs. This approach allows insurers to leverage their current infrastructure while adding modern AI capabilities for enhanced communication. By connecting to real system data, Cell ensures conversations are accurate, context-aware, and seamlessly updated.
The technology's impact is evident in early deployments, where it has reduced quote finalization times from 30 minutes to under three minutes. This dramatic increase in speed boosts quoting capacity and keeps potential customers engaged during a critical stage of their journey. The automation of routine follow-ups prevents conversations from stalling and improves conversion rates.
Strategic Funding and Future Growth
The $7.2 million USD funding was led by Toronto's Radical Ventures, with participation from a16z Speedrun and angel investors from Figma and OpenAI. This builds upon previous backing from figures like Cohere CEO Aidan Gomez, bringing total financing to $8.4 million USD. The support signals confidence in the company's approach to modernizing a legacy industry.
With this capital, General Magic plans to expand its team, enhance its product, and accelerate its go-to-market strategy. While intending to maintain a lean structure, it will make strategic hires to support its growth. The funding is earmarked to scale the solution and bring its benefits to more carriers and brokers.
Investor Confidence and Vision
Sanjana Basu of Radical Ventures highlighted the company's value in bridging the gap between old and new technologies. She noted that by building a reasoning layer atop existing systems, General Magic unlocks value trapped within legacy infrastructure. This strategy enables large enterprises to become AI-native without a costly overhaul of their core systems.
Founded in 2024 as OpenSesame by Jai Mansukhani and Anthony Azrak, the company focused on insurance after participating in the a16z Speedrun accelerator. This experience provided crucial mentorship and resources, leading to a refined mission to solve industry communication bottlenecks. Investors praised the founders' rapid progress and potential to disrupt a major legacy sector.
General Magic's latest funding marks a significant step in its ambition to automate and improve customer interactions in insurance. By focusing on seamless integration and tangible efficiency gains, the company is poised to deliver a more responsive experience for customers and intermediaries. As the industry continues its digital transformation, General Magic's AI-driven approach positions it as a pivotal force for change.