PledgeProvider of business insurance for startups and high-growth companies, today announced that it has raised $90 million in new funding.
The $90 million figure was raised in two rounds: a $60 million Series C co-led by SVB Capital (a subsidiary of Silicon Valley Bank) and Ribbit Capital, which values the company at $550 million, and a previously undisclosed amount. Leads the $30 million Series B1. Redpoint Ventures.
With the latest funding, San Francisco-based Vouch has now raised a total of $160 million since its 2018 inception. Other investors include Allegis Group, Sound Ventures and SiriusPoint.
While there are many insurance technology companies out there that serve consumers, there are very few that offer it to companies, much less startups. Vouche describes itself as “a new kind of insurance platform” for the startup that offers fully digital, “compliant coverage that takes minutes to activate.”
Over the past year, Vouches has seen impressive growth. The company declined to reveal hard revenue figures, but said it has seen “7x” growth in its customer base year over year and currently protects more than $5.7 billion in risk across thousands of policies. Today, Vouche has more than 1,600 customers, including Pipe, Middesk, Neighbor, and Rutable. It is also the “preferred” business insurance provider for customers of Silicon Valley Bank, Brex, Carta and WeWork. Y Combinator also refers vouchers to its portfolio companies.
To vouch for co-founder and CEO Sam Hodges, the ability to attract some of the highest-profile businesses in the startup world speaks to the company’s understanding of the startup ecosystem.
“It is our responsibility to meet startup founders and give startups flexibility as they navigate changing laws, regulations, and the virtual and physical locations of their businesses,” he said.
Like many other companies, Vouch has had to change its model during the pandemic to adapt businesses to a variety of emerging risks. For example, last year, Vouch saw a shift in the space its startup clients deliver to teams. Before the pandemic, about 30% of teams were remote. During the pandemic, this figure has risen to over 53%. As a result, Vouches developed a wide range of insurance coverage to adapt to the “new normal”.
Its new line of proprietary products and services aimed at startups include: work from anywhere coverage, comprehensive cyber coverage and embedded insurance. It also expanded its underwriting capabilities to serve early-stage growth-market startups.
Specifically, work from anywhere coverage is in direct response to pandemic-related changes in remote work and can insure up to $500,000 per incident and includes a specified asset owned by the startup regardless of the location of that asset. can.
A major difference to Vouches, Hodges said, It is now the only business insurance provider that has its own insurance carrier, which means that the company backs its policies.
“This capability means we have a lot more control over how we design and underwrite our policies – which translates into better coverage and a better experience for our customers,” he said.
Hodges co-founded Vouch with Travis Hedge three years ago after seeing how challenging it can be to get business insurance for a company that needs to start up and then scale.
The goal is to make finding new customers as easy as possible and to personalize as much coverage as possible based on the needs of each company based on their customer base, stage of development, and the founder’s exposure to risk. Be.
“A typical customer can get a quote and tie up their coverage online in less than 10 minutes without any phone calls or paperwork,” he told . “Vouch also has several coverage features that are tailored specifically for startups. For example, our directors and executives coverage includes a cap table coverage feature specifically designed to protect startups.”
Hodges said Vouch looks at startups that need business insurance on a case by case basis.
For example, it asks questions such as, “Does an e-commerce company handle a very limited amount of client-sensitive information?” If so, it makes sense to lower its cyber insurance coverage limit and pay less for your policy.
Conversely, if a startup is trying to raise funds, it may need to invest more in the insurance of Vouch’s directors and officers to ensure it is covered in case disputes arise in the future.
Looking ahead, Hodges said the new capital will go toward continued investments in technology capabilities, expanding its product offerings, creating more hiring and embedded insurance for its partners.
With regard to embedded capabilities, within the next 12 months, customers of all partners of the Company will be able to purchase voucher insurance directly from the websites of those partners. Vouch’s headcount has more than doubled, from 55 employees in September 2020 to 125 full-time employees currently, and Hodges expects it to continue to grow.
Greg Baker, president and CEO of SVB Financial Group, said Vouch’s mission aligns with that of SVB, in that they both aim to “empower the innovation economy.”
“This is what Vouch is doing today, helping startups and tech innovators reduce their risk,” he wrote via email. “We are proud to co-lead Vouche’s latest funding round, to help startups Provide access to the insurance they need as they add headcount, grow their customer base, or raise their own funding rounds.”