Vouch, which provides business insurance to high-growth startups, announced today that it raised $90 million.
The $90 million figure was raised in two rounds. A $60 million Series C led by Ribbit Capital and SVB Capital, a subsidiary of Silicon Valley Bank, valued the company at $550m. Additionally, a $30 million Series B1 led previously unannounced by Redpoint Ventures raised $30 million.
Vouch, a San Francisco-based company has raised $160 million in financing since its 2018 start. SiriusPoint, Sound Ventures, and Allegis Group are some of the other investors.
There are many companies that provide insurance technology services to consumers. However, it is rare that they offer this service to businesses. Vouch is a startup insurance platform that provides fully digital and tailored coverage. It can be activated in just minutes.
Vouch has experienced impressive growth over the past year. Although the company did not reveal exact revenue numbers, it said that it experienced a 7x increase in customer base year-over-year and that its current risk protections cover over $5.7 billion across thousands of policies. Vouch today has over 1,600 clients including Pipe, Middesk and Neighbor. It is also the preferred provider of business insurance to customers at Silicon Valley Bank, Brex and Carta. Vouchers are also offered by Y Combinator to portfolio companies.
Sam Hodges is co-founder of Vouch and CEO. The company's ability to attract high-profile startups speaks volumes about its understanding of the startup environment.
He said that it was our responsibility to meet the startup founders wherever they are and provide flexibility for them as they navigate changing laws and regulations.
Vouch, like many other businesses, had to change its business model to meet the new risks faced by them. Vouch witnessed a shift in the distribution of its startup client teams last year. Nearly 30% of remote teams existed before the pandemic. This number has increased to more than 53% since the pandemic. Vouch has developed a wider range of insurance coverages in order to adapt to this new normal.
Its new line of services and products aimed at startups includes work from anywhere coverage, wider cyber coverages, and embedded insurance. It also increased its underwriting capabilities in order to service early-stage and growth-market startups.
The coverage for work from anywhere is specifically designed to cover the remote shifts in pandemic-related work. It can insure up $500,000 per occurrence, and can also include specified properties owned by startups regardless of their location.
Hodges stated that Vouch is the only business insurance provider with its own insurance carrier. This means that the company can back its policies.
He said that this capability allows us to have more control over how policies are built and underwritten, which results in better coverage and a better client experience.
After seeing the difficulties of getting business insurance for start-ups, Hodges and Travis Hedge co-founded Vouch three years ago.
Our goal is to make it as simple as possible for new customers to be onboarded and to personalize coverage as much as possible depending on each company's specific needs, based on their customer base, stage in growth, and founders risk tolerance.
TechCrunch spoke to him that a typical client can obtain a quote online and bind their coverage in less than 10 minutes. Vouch has many unique coverage features, which are geared specifically for startups. Our coverage for directors and officers includes a captable coverage feature that is specifically designed to protect startups.
Hodges said that Vouch is available to startups who need business insurance.
It asks questions such as: Does an ecommerce company handle very limited client-sensitive data? If so, it might make sense to have a lower cyber coverage limit and pay less for its insurance policy.
If a startup wants to raise funds, it may need to invest in Vouchs officers and directors insurance to ensure it is protected in case of future disputes.
Hodges stated that the new capital will be used to continue investing in technical capabilities and expanding its product offerings. He also said that it will hire more people and build embedded insurance for its partner partners.
In the next 12 month, all Vouchs customers can purchase insurance directly through the partners' websites. Vouchs' headcount has increased more than twice, from 55 employees in September 2020, to 125 currently, and Hodges anticipates that this will continue to increase.
Greg Becker, President and CEO of SVB Financial Group stated that Vouchs aligns with SVBs because they both seek to support the innovation economy.
Vouch today is helping tech innovators and startups to reduce their risk as they grow. He wrote via email. Vouchs' latest funding round was a proud co-leadership. Vouchs provides insurance to startups as they grow their customer base, add staff, or raise funding.
