In 2014, Angus McDonald, former head of publisher partnerships at Yahoo (full disclosure: TechCrunch’s parent company), teamed up with former Googler Chris Bayley to found Cover Genius. or warranty. After expanding business to all 50 states in the United States and his more than 60 countries, Cover Genius is gearing up for its next phase of growth, McDonald said.
Cover Genius today announced it has raised a $70 million Series D round led by Dawn Capital, with participation from Atlas Merchant Capital, GSquared and King River Capital. The 420-employee company has raised $165 million in total, with McDonald’s telling TechCrunch that the proceeds will be used to “help grow the business” and further expand Cover Genius’ insurance distribution offerings. rice field.
“We offer a wide range of protection solutions for partners in many verticals, including the world’s largest airlines and travel companies, retailers and logistics companies, mobility, automotive and gig economy companies, banks, fintechs, proptechs and businesses. We co-created a to-business software and an event ticketing company,” McDonald said in an email interview. “From our inception in 2014 to our Series B in 2018, we self-started at an early stage with only $1 million in funding, and we are committed to ensuring healthy, sustainable cash flow while being thrifty in our DNA. We have been blessed to have important partners to help us.”
McDonald and Bayley sought to launch Cover Genius after facing insurance problems at their previous joint venture, an international online travel agency. They found it difficult to work with traditional insurers because each country the co-founders wanted to target required separate policies with leads in different countries.
In creating Cover Genius, McDonald’s and Bailey worked to obtain embedded insurance licenses and approvals in most major countries around the world. Unlike typical insurance plans, embedded insurance like Cover Genius is bundled with the purchase of a product or service and offered in real-time or at the point of sale.
Ride-sharing app Ola uses Cover Genius to provide insurance for both drivers and passengers. Betterplace, an India-based human resources management software provider, uses Cover Genius technology to deliver healthcare to contract workers. For Zip, a buy-now-pay-later provider, Cover Genius built his AI-powered tool to classify insured items (such as power drills) and recommend warranties to e-commerce customers. doing.
“We strongly believe in embedded insurance models, the ability to protect customers at the point of sale or at sign-up, and we believe there will be a significant shift in value from D2C and traditional insurers to partnerships on digital platforms. with InsurTech,” McDonald continued. “The customer will now have access to customized protection at the right time, and will not have to take the inconvenient second step for him to purchase protection. Partners will achieve revenue growth and customer and insurers will benefit from data-rich distribution channels.”
Embedded insurance is undoubtedly a hot new feature in InsurTech. Startups in this space, many founded within the last five years, have raised nearly $800 million in 2021 with his VC funding. Also, a recent report from Simon Torrance, his finance and app strategy advisor at Embedded, estimates that property and casualty insurance alone can embed insurance. By 2030, he will account for over $700 billion in gross premiums written, or his 25% of the total global market.
New York-based Cover Genius competes with insurance vendors such as Extend and Bolttech. But he also has a strong customer base covering 10.5 million customers across merchant partners such as Intuit, Kayak, Booking Holdings, Priceline, Turkish Airlines, SeatGeek, Amazon, eBay and Wayfair. Cover Genius was initially hit by the pandemic — the company primarily offered travel insurance in 2020 as the industry took a hit — McDonald’s has expanded into a variety of new market segments over the past two years. He said that he was able to advance to
Business expansion was brought about by a combination of product launches and acquisitions. In July, Cover Genius made a strategic investment in India-based insurtech Ensuredit and acquired Booking Protect, a ticket refund protection startup that brought SeatGeek to the Cover Genius platform. And in June, he said, Cover Genius launched a “price-optimized” guarantee service for small and medium-sized e-commerce businesses.
One of the hurdles on the road to expansion Cover Genius has to overcome is the general feeling about insurance. This is not positive. His 2019 survey by the Geneva Association, a global association of insurance companies, found that more than half (53%) of people have had a bad experience with insurance. In another IBM report, less than half of customers said they trusted the insurance industry.
McDonald says the Cover Genius product speaks for itself.
“By providing a worry-free and high-quality customer experience, backed by product relevance and seamlessness from point of sale to billing, our partners enter new territory with their customers,” he said. said. “In the past, have they worked with traditional insurers that have negatively impacted the customer experience and consistently caused customer churn and backlash to their brand? Otherwise the “heavy lift” sits with them. ”