The affiliate is raking in $147 million at a $1.05 billion valuation, showing that the thorny insurance tech market isn’t immune to growth.

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branch offa startup that offers packaged home and auto insurance has raised $147 million in Series C funding at a post-investment valuation of $1.05 billion.

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Weatherford Capital, a family-owned private equity firm, led the round, which also included existing and new backers such as Acrew, American Family Ventures, Anthemis, Gaingels, Greycroft, HSCM Ventures, Narya, SignalFire and Tower IV. With this latest funding, the Columbus, Ohio branch has raised $229.5 million since its inception in 2017.

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Branch, according to co-founder and CEO Steve Lekas, is the only insurance company he knows that can link insurance through an API, and the only one that can combine auto and home insurance in a single transaction.

Another feature of Branch, he adds, is that it can be incorporated into the shopping experience. In other words, the company is partnering with mortgage or security vendors to integrate point-of-sale insurance into its products. For example, if a person closes a house, they have the option to purchase branch insurance at the same time. Partners include Homepoint, OpenRoad Lending and SimpliSafe.

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This distribution model means that Branch spends less on customer acquisition and is said to be able to offer markups at a lower price than competitors. But the startup also offers its insurance directly to the consumer and through agencies.

The company has shown impressive growth. While Lekas ​​declined to disclose exact earnings figures, he said Branch has increased its annual writing bonus by 1,300% over the past 12 months. Since the announcement of its $50 million almost exactly a year ago, the startup also increased its headcount from 75 to just over 400 today.

The company plans to partially use its new capital to accelerate its US rollout. It currently has a presence in 28 states and has expanded to nine new ones this year.

“The difference that Branch does in a different way is charging an appropriate amount to cover the cost of executing each policy,” Lekas ​​told TechCrunch. “We have a price and a model that no one else can replicate at this stage. And so we’re trying to redouble our efforts and scale quickly across all 51 states… The funny thing is, even though we’re four years younger than the insurance companies that came before us, I think we’ll be first. to reach positive cash flow at a stretch.”

Lekas ​​began his career at Allstate, where he continued to hold positions in underwriting, technology, and product management. He then built Esurance’s first online home insurance business.

But deep down, Lekas ​​wanted to find a way to make insurance more accessible to more people. So he teamed up with Joe Emison and Branch was born. Since entering the market in 2019, Branch claims to have saved its “members” an average of $548 per year.

Image credits: branch off

Branch is not the first insurance company that Weatherford has backed. He also backed The Zebra, an Austin-based company that runs an insurance comparison website. reached unicorn status last year.

For Branch, raising a nine-figure round in a challenging macro environment and amid a global VC downturn is no easy task. Add to that the fact that a number of insurance companies such as Root, Lemonade, Hippo and Metromile went public last year. struggling with stocks at record lows and others like Policygenius, dismissaland Branch’s accomplishments seem even more impressive.

However, it was difficult to attract the attention of investors in the beginning, Lekas ​​admits.

“We came from a place where we were not the first insurtechs so we struggled early as a VC doesn’t like to compete with a VC so once a VC believes there is a well-funded, smart, trustworthy group of people solving a problem , then they think twice before investing more money in a competitor,” he told TechCrunch. “But now we are at such a scale that we sell more products than most of those who came before us. I think what we did is what everyone thought they invested in from the very beginning.”

Ian Sigalow, co-founder and managing partner of early and longtime investor Branch Greycroft, said his firm has backed insurtech in every round it has raised “from the start.”

“What attracted us from the start hasn’t changed – Branch is one of the first companies to offer built-in home and auto insurance and delivers huge savings for its members,” Sigalow told TechCrunch. “Steve Lekas ​​was also different from many other insurance founders due to his previous experience – he had already expanded the homeowner business at Esurance and led products, data science, strategy and marketing at Verisk, which is one of the largest data providers for the insurance industry. With his experience, he was able to realize a market opportunity very quickly.”

He believes that Branch’s biggest difference is that its tech stack allows you to instantly guarantee and link policies using just a name and address, ultimately resulting in cheaper policies.

“As a business, especially at a time when insurtech companies are struggling in the public market, we believe that Branch technology stands apart and will allow them to grow quickly as well as provide sustainable long-term loss rates,” Sigalow added.

In addition to working to make a profit, Branch also has more altruistic goals. The startup is a public goods corporation and operates the interchange, an organization in which policyholders are the actual owners of insurance premiums. The structure is designed to align incentives and provide members with the greatest possible savings. He also formed a non-profit organization, Safety Nestto help those who are uninsured or underinsured.

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