Tom Coward is CFO of Cytora, a London-based risk digitization and underwriting platform for commercial insurance. He joined the company as finance director in 2017 and has helped guide its growth from an early-stage insurtech into a global business working with major insurers across the UK and the U.S.
More recently, Coward oversaw Cytora’s acquisition by U.S.-based Applied Systems. He spoke with us about managing an unexpected acquisition, preparing a scaling company for scrutiny from potential buyers, and why successful CFOs need to understand the business rather than finance alone.
Can you tell us a little about your career and what led you to become CFO at Cytora?
I studied math at university and then worked in audit at Deloitte. It gave me a strong foundation in finance, but after three years, I felt that my learning trajectory had started to slow. I wanted a closer connection between my work and its effect on the business, so I joined a company with about 10 people. Cytora was the second small company I joined.
I enjoy working with people who are excited about driving change. In a small company, you have the autonomy to make decisions, see the results, and take responsibility for whether those decisions were right or wrong. You can then learn, adjust, and build something you are proud of.
Moving from Deloitte into a 10-person company was probably the hardest career move I made. I made many mistakes, but I was in an environment where that was acceptable as long as I learned and improved.
Having a network of people in similar roles also helped. When I encountered something for the first time, I could ask people who had already experienced it.
Cytora has grown significantly during your time there, including expanding into the U.S. What has that experience been like from a CFO’s perspective?
The role went through many different stages. I was initially the first person working outside engineering, product, and sales, so I wore many hats.
As we expanded into the U.S., there were many decisions to make from the ground up. We had to determine where to establish ourselves, how to structure the company, and how to build the team.
We also had to decide when to incorporate the business. Should we do it immediately, wait until we had 10 employees, or wait until we reached a certain level of revenue?
There were many decisions that we needed to make.
How has your role as CFO evolved as the business has scaled?
It has changed significantly. Before the acquisition, certain areas became more important as the company grew. Information security is one example. It may not be the first priority when a company is testing its product and looking for product-market fit, but it becomes essential once customers begin using the product. I initially owned that responsibility and built a team around it.
The same applies to areas such as legal. As the company scales, you begin bringing in people with specialized expertise. Until then, those responsibilities are on you, so it is important to surround yourself with good advisers.
The role changed again after the acquisition. Cytora had about 130 employees when Applied acquired it. Applied has approximately 130 people in its finance team alone. We went from having a very small finance team to gaining access to specialists across tax, legal, information security, and human resources.
Applied acquired Cytora earlier this year. What was that process like from your perspective as CFO?
The acquisition was not something we expected. We began the year preparing for a Series C funding round and had received multiple term sheets. One of the prospective investors was also an investor in Applied, so they introduced the two companies. Applied then expressed its interest in acquiring Cytora.
We saw it as an opportunity to accelerate growth. Cytora primarily works with insurance carriers, while Applied has a significant presence in the broker and agency market. Connecting the two sides of the insurance industry had the potential to multiply the opportunities available to both businesses.
The decision still required a great deal of consideration from the management team, board, and investors. Cytora was growing quickly and doubling revenue each year, so some investors questioned why we would sell at that point. Once everyone discussed their motivations and agreed on the direction, we entered the process.
It was intense. We went from signing the letter of intent to completing the acquisition in six weeks. My responsibility was to manage the process while protecting the rest of the business from disruption. The company still needed to build products, win customers, and grow existing accounts.
Keeping that momentum was also important to the acquisition. We could enter meetings and show that we had signed another customer, expanded an existing relationship, or released a new product. It demonstrated that the business was continuing to perform and gave us another option if the acquisition did not proceed.
I had never participated in a merger or acquisition from either the buyer’s or seller’s side. Even the concept of a letter of intent was new to me, so I learned a great deal on the job. We were fortunate to have a supportive board, experienced investors, excellent lawyers, and strong advisers around us.
What are some of the biggest financial and operational considerations when preparing a company for an acquisition?
The first step is to get your books in order and make sure the data room is ready. People will examine that information in great detail, so you need to understand what is included, feel comfortable with it, and provide as complete a picture as possible.
There will always be questions for which you do not immediately have the information, but the records should be as comprehensive as you can make them.
It is also important to ensure that the management team, board, and investors are aligned. Going through an acquisition would be much more difficult if those groups wanted different outcomes. We were fortunate to have supportive investors, an experienced board, and a management team that agreed on what we wanted to accomplish.
Insurtech sits at the intersection of insurance and technology. What makes the CFO role in an insurtech company unique?
The role may not be significantly different from other fintech CFO positions because both operate within regulated environments. That creates important financial and operational considerations.
The objective is also to build a company that can scale. For Cytora, it was important to think globally from the beginning. We considered how the product could scale across different lines of business, geographies, and workflows.
That approach has been an important part of Cytora’s success and has enabled us to work with global insurers across multiple markets.
What advice would you give finance leaders who are considering a career as a CFO?
Find an industry that genuinely interests you. What makes someone a great CFO is being an expert in the business, not simply an expert in finance.
Financial skills are still necessary. You need to understand accounting, build a profit-and-loss statement, and create a financial model. I consider those skills the basic requirements of the role.
The real value comes from business acumen and commercial understanding. A great CFO can interpret the company’s data, identify the factors that affect growth, understand what will happen when those factors change, and use that knowledge to help move the business forward.
CFOs also have access to information from across the organization. They see what’s happening in sales, engineering, product, legal, contracts, and the company’s bank accounts. They need to connect those different pieces of information and make them understandable to stakeholders at different levels of the organization.
What’s the best piece of career advice you’ve ever received?
When you are standing next to a mountain, that is when it looks the biggest.
When you are close to a major decision or challenge, it can feel enormous. A year, two years, or five years later, you may barely remember it. When you look back, it may appear much smaller and less consequential than it did at the time.
I feel a strong responsibility to the company, its employees, investors, management team, and customers. I want the business to succeed for everyone involved. However, you cannot become so concerned with the problem immediately in front of you that you lose perspective. Sometimes you need to step back and see the wider picture.
Tom Coward is CFO of Cytora, a London-based risk digitization and underwriting platform for commercial insurance. He joined the company as finance director in 2017 and has helped guide its growth from an early-stage insurtech into a global business working with major insurers across the UK and the U.S.
More recently, Coward oversaw Cytora’s acquisition by U.S.-based Applied Systems. He spoke with us about managing an unexpected acquisition, preparing a scaling company for scrutiny from potential buyers, and why successful CFOs need to understand the business rather than finance alone.
