- Vouch Insurance, an insurance company serving early-stage startups, announced it raised $24.5 million in Series A funding
Vouch Insurance — an insurance company that is serving early-stage startups — is considered the only insurance company dedicated 100% to serving tech startups. And Vouch has created a platform that is entirely digital, easy to use, and takes a matter of minutes rather than days or weeks to activate coverage.
Recently, Vouch announced it raised $24.5 million in Series A funding. This round of funding was led by Ribbit Capital and SVB Financial Group (parent company of Silicon Valley Bank) with participation from Y Combinator, Index Ventures, and 500 Startups. With this round of funding, Vouch will be launching in more states in the coming months, expand its product offerings, and build out its team.
Vouch is authorized by regulators to sell to startups in Utah and Illinois. And companies there can sign up for coverage immediately. And Vouch expects to be able to serve startups in California this fall, in 10 states by the end of the year, and nationwide by the end of 2020.
Vouch’s proprietary policies are backed by Munich Re, which is one of the largest A-rated reinsurers in the world. And Vouch is also a preferred provider of insurance for Silicon Valley Bank’s client base, including about 50% of venture-backed technology and life science startups in the U.S.
“As seen time and again over the past few years, startups face a range of risks similar to large established companies, yet the current insurance market doesn’t understand our unique needs. This leads to policies that don’t cover what they need to, cost too much, and take too long to get,” said Sam Hodges, the CEO and co-founder of Vouch. “Vouch is the kind of insurance company I wished existed when I founded my last company.”
Vouch was co-founded last year by Hodges — who was previously a co-founder of FundingCircle U.S. and CEO of WorkingPoint Software. And he was also in the inaugural class of the Finance Leaders Fellowship at the Aspen Institute. Hodges had started his career as a strategy consultant and investor in the insurance sector.
Vouch’s VP of business development Travis Hedge is also a co-founder of the company. Hedge was previously an investor with Nationwide Insurance and SVB Capital, the venture capital subsidiary of SVB Financial Group where he worked with companies in a variety of tech sectors, including Root Insurance.
“Vouch has a great team and solution to address a problem that faces many of our startup clients: an insurance market that doesn’t understand them or serve them well,” added Greg Becker, CEO of Silicon Valley Bank. “We are excited to make this investment and partner and support the Vouch team as it delivers insurance products to startups in the U.S.”
Vouch products are sold exclusively online. And in just 10 minutes, approved startups are able to activate coverage for common risk areas like general liability, property, cyber, E&O, and D&O. And since it is tailored for startups, Vouch’s coverage is also much more affordable than typical business insurance. The policies start at $300 per year for basic theft and litigation coverage.
“As a startup, you can’t raise money, sign a lease, or often sign a large customer without the right insurance. With Vouch, we were able to quickly get the exact coverage we needed without weeks of paperwork — and get the peace of mind that comes with being covered,” explained Lance Hydrick, President of Shift Health, a customer who participated in Vouch’s beta program.
Vouch also develops tools to help assess, mitigate, and avoid risks. And Vouch offers expert advice and just-in-time coverage to help its startup clients move faster and realize their full potential.
“I use Vouch because they keep things simple,” commented Blesson Abraham, CEO and founder of Cambio, a Vouch customer in Chicago. “Administrative tasks can just slow things down when you’re building a business. With Vouch I didn’t waste time jumping through countless hoops to get insurance. Instead, it took just a few minutes, on mobile, to get the coverage my business needed.”
