Company raises $24.5 million;
Preferred Provider of Silicon Valley Bank;
Live in Utah and Illinois
Vouch Insurance, a new type of insurance company serving early stage startups, launched proprietary insurance products and risk assessment tools designed specifically for high growth companies today. As the only insurance company dedicated 100 percent to serving tech startups, 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.
The company also announced that it has raised $24.5 million in Series A funding. The round was led by Ribbit Capital and SVB Financial Group, the parent company of Silicon Valley Bank, with participation from Y Combinator, Index Ventures, and 500 Startups. Vouch will use the funding to launch 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. 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, one of the largest, A-rated reinsurers in the world. Vouch is also a preferred provider of insurance for Silicon Valley Bank's client base, which includes roughly 50 percent 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, 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 in 2018 by Hodges, the company's CEO and a longtime innovator in the fintech space. He previously was a co-founder of FundingCircle U.S. and CEO of WorkingPoint Software. He was also in the inaugural class of the Finance Leaders Fellowship at the Aspen Institute. Sam started his career as a strategy consultant to and investor in the insurance sector. The other co-founder is Travis Hedge, Vouch's vice president of business development. Hedge previously was 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. The rest of the founding team includes technologists and risk experts from companies such as Silicon Valley Bank, NerdWallet, Zenefits, LevelMoney, Travelers Insurance, Lyft, and Google. This summer Vouch completed the Y Combinator program.
"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," said 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 at vouch.us. In just 10 minutes, approved startups can activate coverage for common risk areas such as general liability, property, cyber, E&O, and D&O. Since it is tailored to startups, Vouch's coverage is also much more affordable than typical business insurance. 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," said Lance Hydrick, President of Provo-based Shift Health, a customer who participated in Vouch's beta program.
As an insurance company, and not a broker, Vouch also has skin in the game with its clients; so it develops tools to help assess, mitigate, and avoid risks. 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," said 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."