Insurtech startup Ethos has raised $35 million in a Series B round of financing led by Accel.
The funding comes less than five months after the San Francisco-based company emerged from stealth and announced an $11.5 million Series A raise.
Google Ventures (GV) also participated in the latest round, along with previous investors Sequoia Capital and Arrive, a subsidiary of Roc Nation, and a debt facility from Silicon Valley Bank. With the latest financing, Accel Partner Nate Niparko will join the Ethos board of directors, and GV General Partner Tyson Clark will join the company’s board as an advisor.
Ethos says its mission is to make “modern, ethical life insurance” accessible to the masses through its proprietary technology, according to its website.
The company claims it makes getting a life insurance policy “fast, easy and inexpensive” by “turning a process that was once like going to the DMV to more like shopping online,” according to a press release. It is licensed in 49 states.
A prospective customer can apply and qualify for a policy in about 10 minutes, CEO and co-founder Peter Colis told Crunchbase News, without having to go through medical exams or blood tests—as most people do when applying through more traditional life insurance providers. That’s because the company applies data science and predictive analytics to determine an individual’s life expectancy, he said. Ethos’s workers are all salaried, so they don’t work on commission and aren’t trying to “upsell” customers, according to Colis. He and his former Stanford University grad school roommate, Lingke Wang, previously founded secondary life insurance marketplace Ovid Corp.
Accel’s Niparko believes the $955 billion life insurance industry has had a “product and reputation problem” for some time.
“Ethos takes a technology-first approach to eliminate friction from the applications and claims process for its customers and has built a brand that people love and trust,” he said in a written statement.
Since its official launch in June 2018, the company has seen its revenue, customers, and applications grow by more than 400 percent, according to Colis. (Of course, that’s starting from a base of zero.) It processes thousands of applications a month, he said.
The startup has attracted a bevy of investors in just six months’ time. Besides some of Silicon Valley’s most prominent VCs, Ethos has also raised money from Stanford University, actor Robert Downey Jr.’s Downey Ventures, NBA player Kevin Durant’s Durant Company, and actor Will Smith’s Smith Family Circle.
The company plans to use its latest capital to accelerate growth and continue refining its product and risk analysis abilities, according to Colis. It currently has 30 employees and aims to hire another 20 to 30 over the next few months, with a focus on engineering, product, and marketing staff.
“We’re growing very quickly without having to do a hard sell,” Colis told Crunchbase News. “It’s an automated business and people like the simple approach.”
Ethos is just one of a number of startups working to digitize the insurance industry. In July, small business digital insurance provider Next Insurance raised $83 million in a Series B round led by Redpoint Ventures. Lemonade and Root Insurance have also gained traction from investors looking to influence the user-led future of policy purchases.