Ascend raises $5.5M to provide a BNPL option for commercial insurance

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Ascend on Wednesday announced a $5.5 million seed round to advance its insurance payments platform, which combines financing, collections and payments.

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First Round Capital led the round and was joined by Susa Ventures, Firstmark Capital, Box Group and a group of angel investors, including Coalition CEO Joshua Motta, Newfront Insurance executives Spike Lipkin and Gordon Weintroub, Vouch Insurance CEO Sam Hodges, Layer Insurance CEO Philippe. Hodges, Anzen Insurance CEO Max Brunner, Counterpart Insurance CEO Tanner Hackett, Bunker Insurance former CEO Chad Nitschke, SageSure executive Paul Vandermark, Instacart co-founders Max Mullen and Brandon Leonardo, and Houseparty co-founder Ben Rubin.

This is the first funding for the company that is live in 20 states. It developed the payments API to automate end-to-end insurance payments and now offers a buy, pay later financing option for distribution of commissions and carrier payments, some co-founders and co-founders said. CEO Andrew Wynn, said that was unique to commercial insurance.

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Wynn started the company with co-founder Pravin Chekuri in January 2021 after working together at Instacart. He originally started Shelter, connecting customers with trained maintenance professionals and was acquired by hippo in 2019. Working with insurance companies, he recognized how rapidly the insurance industry was modernizing, yet insurance vendors still struggled with customer experiences due to outdated payment procedures. He began climbing to solve that payment pain point.

Wynn said the insurance industry is still operating on paper and pen — about 600 million paper checks are processed each year. He referred to insurance as the “spaghetti web of money movement,” where it can take up to 100 days to receive payment from the customer to the insurance carrier as it makes its way through the middlemen. Beyond that, there’s only one way insurance companies can make a profit, by paying off those hundreds of millions of dollars and investing it.

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Home and auto insurance can be broken down into payments, but the commercial side isn’t customer-friendly, Wynn said. Insurance is often paid out a lump sum annually, however, so paying tens of thousands of dollars in one payment is not something every business customer can manage. Ascend is offering point-of-sale financing to enable insurance brokers to split those commercial payments into monthly installments.

“The insurance corpus continues to focus on annual payments as they have no choice,” he said. “They want to have all their money up front so they can invest it. Our platform not only enables customers to pay how they want to pay, but also helps carriers sell more insurance.

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Startups like Ascend aimed at disrupting the insurance industry are also attracting venture capital, with recent examples including Vouch and Marshmallow, which raised nearly $100 million, while Insurance raised $100 million.

Wynn sees other companies doing vertical payment software for other industries like health insurance, which he says is “a good sign for where the market is going.” That’s where Wynn believes Ascend is competing, although some incumbents are offering premium financing, but Ascend doesn’t in a digital way.

He intends to deploy the new funds on product development, go-to-market initiatives and new work for his locations in New York and Palo Alto. He said the growth attracted a group of angel investors in the industry who were looking for a product like this to help them sell more insurance and build it from scratch.

After only eight months, it’s a bit early to discuss some development for the Ascent, but Wynn said the company signed on its first customer in July and six more in the past month. The clients are large digital insurance brokerages and represent $2.5 billion in premiums. He also hopes to obtain licenses to operate in full paid form in processors in all states so that the company can be in all 50 states by the end of the year.

The ultimate goal of the company is not to replace brokers, but to offer them technology to be more efficient with their operations, Wynn said.

“The brokers are here to stay,” he said. “What will happen is that tech-enabled brokers will be able to serve clients nationally and run their business, collect payments, finance premiums and reduce backend operation friction.”

Bill Trenchard, partner at First Round Capital, met with Wynn while he was still with Shelter. He believes insurtech and fintech are following a similar story arc, where disruptive companies are going to market with less friction and better products and being digital-first, are able to meet customers. where they are.

By moving digital payments toward insurance, Ascend and others will lead the market, which is so large that companies will have many opportunities to succeed. NS global commercial insurance market It was valued at $692.33 billion in 2020, and is expected to top $1 trillion by 2028.

Like other firms, First Round looks to the team, product and market when it evaluates potential investments, and Trenchard said Ascend checks those boxes. He not only liked how fast the team was moving to build momentum around itself in terms of securing an early pilot with customers, but also including well-known digital-first companies on board.

“The magic is how to automate underwriting, how to build a data mote and be a first mover — if you can do all three, that’s great,” Trenchard said. “Instant approval and access to data is a key advantage to doing a better job than others and is going to change how insurance is bought and sold.”

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