Bestow, which operates a digital life insurance platform, has raised $70 million in a Series C funding round.
New backer Breyer Capital, as well as existing investors Valar Ventures, New Enterprise Associates and others, participated in the financing, which brings the startup’s total funding secured to date to $145 million since its 2016 inception. The investment comes just less than eight months after Bestow secured a $50 million Series B round.
The Dallas-based company’s plans to use its new capital to expand its offerings, scale its platform services and increase growth into new distribution channels and partnerships, Bestow co-founder and president Jonathan Abelmann said in an interview with FinLedger.
“When you think about all the products that we have, we have a very narrow product set right now,” he said. “[Our] Term Life covers 10 to 20 years, we’re going to see some pretty dramatic expansion across Term Life.”
Bestow has seen impressive growth in 2020. It recently launched its Protect API and overall, policy sales are up more than 450 percent year over year, according to the company.
Bestow launched its platform three years ago to help people secure “affordable” term life insurance coverage. The application process “can take as little as 5 minutes,” and does not require a medical exam, the company claims.
Over the past year, Bestow hired over 70 new team members bringing its total employee count to 125. Currently, Bestow has about 30 open job positions opened and projects to grow to about 200 employees in 2021, with its Series C funding round to help propel the growth.
The news comes on the heels of Bestow recently announcing it had entered into a definitive agreement to acquire Iowa-based Centurion Life Insurance Company — a deal that would push the insurtech to become a nationally licensed carrier. Currently, Bestow is a licensed carrier in Texas, while Centurion is licensed in 47 states and the District of Columbia. The company would not disclose the financial terms of the deal, but Bestow is purchasing Centurion – which was founded in 1956 – from Wells Fargo.
Looking ahead, Bestow plans to expand its offerings beyond term life insurance, and Abelmann said that Bestow’s platform has the capability to service multiple types of products.
Bestow is growing via a variety of distribution channels, including working with fintechs such as Acorns, Chime, Stash and other banks and finance apps, Melbourne O’Banion, co-founder and CEO of Bestow O’Banion, has said. Recently, Bestow partnered with Tomorrow, which helps users apply and buy life insurance through its app.
Navigating the COVID-19 pandemic hasn’t been easy for anyone, but Abelmann did say that it has heightened awareness around the importance of life insurance for consumers.
“Ultimately in our business, it’s just really increased demand and we’ve been working to resource accordingly,” he said.
In general, the insurtech space is one that has seen a number of high-profile IPOs (Root and Lemonade), SPACs (Metromile), M&As (MassMutual) and fundings. In the first six months of this year. Insurtech startups raised $2.5 billion, according to data from Crunchbase that FinLedger reported on here.