The venture-backed insurance world is more than the Lemonades and MetroMiles of the world. There’s more room in the industry for startups to shake things up. One such company, Cambridge-based Insurify, is out today with a new venture round that greatly expands its capital base.
The startup, which had accepted just $6.6 million over two rounds before its latest investment, has raised $23 million in a Series A led by MTECH Capital and VIOLA FinTech. Prior investors MassMutual Ventures and Nationwide took part in the new investment. (Update: Hearst Ventures also took part.)
TechCrunch hasn’t caught up with the company since our own Sarah Buhr covered its first $2 million deal back in early 2016. As you’d expect, a lot has changed in the last four years.
To get under the skin of the new round, TechCrunch caught up with Insurify’s CEO and founder, Snejina Zacharia.
Zacharia, formerly of Gartner, came up with the idea for Insurify after she had an accident years ago. Following an unsatisfying experience working with the insurance industry after the fact, she discovered that consumers “have very, very little idea of how much coverage they need,” and that insurance providers (Insurify started out working with car insurance and is expanding to life and home insurance, as well) were “really struggling to [access] digital consumers because they have very poor UIs, [and] their APIs [were] not up to date.”
Enter Insurify, which bridges that gap. Working to build “automation behind insurance,” Insurify wants to help people find the coverage that they need, online, at a fair price; it’s a good business for the startup, which gets paid when consumers buy new insurance through its tooling.
Insurify, according to Zacharia, operates as a licensed agent for the various types of insurance it helps consumers find.
It’s more than a middleperson, however. The startup wants to bring the buying of insurance more firmly into the digital world. Today, Insurify completes 65% of its new policies online, and provides pre-loaded information to carriers when it passes a consumer over to their side of things.
Insurify is also building out its own technology products that exist a little past insurance, including a “wallet” that lets users manage multiple policies in one place.
TechCrunch asked Zacharia why she decided to raise capital now. According to the CEO, after doing “a lot with almost nothing,” her company is ready to accelerate its go-to-market motion.
In practical terms, the new capital will help Insurify with “horizontal expansion,” like “launching new verticals” that will include home, rental and other types of insurance, she said. Even more interesting, the Series A will also be used to fuel the startup’s marketing arm, which Zacharia says is run like a “hedge fund.” Insurify’s marketing efforts are “automated through [an] artificial intelligence model,” she told TechCrunch, which estimates “the value of every click” through a set of algorithms that it tunes regularly.
(We’ll avoid making a joke about hedge fund returns at this juncture.)
The CEO went on to say that “putting more money and more fuel behind [Insurify’s] marketing engine could really help us tremendously at this point,” helping to explain why Insurify decided to take on more capital when it did.
The startup had options when it came to investor selection, with Zacharia telling TechCrunch that her firm “had multiple, different term sheets” from which to choose. Why MTECH and VIOLA as lead investors? Zacharia emphasized venture partner selection as key, also highlighting the experiences and expertise of each firm (insurance with MTECH, and fintech with VIOLA).
It will be fascinating to see what happens at the meeting point of new capital, an operating marketing engine and an expanding set of products. Presumably Insurify can grow like heck from that confluence of factors. We’ll ask in a few months.