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Ascend raises $5.5M to provide a BNPL option for commercial insurance
Ascend on Wednesday announced a $5.5 million seed round to further its insurance payments platform that combines financing, collections and payables.
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 Wintrob, Vouch Insurance CEO Sam Hodges, Layr Insurance CEO Phillip Naples, Anzen Insurance CEO Max Bruner, Counterpart Insurance CEO Tanner Hackett, former Bunker Insurance CEO Chad Nitschke, SageSure executive Paul VanderMarck, 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 payments APIs to automate end-to-end insurance payments and to offer a buy now, pay later financing option for distribution of commissions and carrier payables, something co-founder and co-CEO Andrew Wynn, said was rather unique to commercial insurance.
Wynn started the company in January 2021 with his co-founder Praveen Chekuri after working together at Instacart. They originally started Sheltr, which connected customers with trained maintenance professionals and was acquired by Hippo in 2019. While working with insurance companies they recognized how fast the insurance industry was modernizing, yet insurance sellers still struggled with customer experiences due to outdated payments processes. They started Ascend to solve that payments pain point.
The insurance industry is largely still operating on pen-and-paper — some 600 million paper checks are processed each year, Wynn said. He referred to insurance as a “spaghetti web of money movement” where payments can take up to 100 days to get to the insurance carrier from the customer as it makes its way through intermediaries. In addition, one of the only ways insurance companies can make a profit is by taking those hundreds of millions of dollars in payments and investing it.
Home and auto insurance can be broken up into payments, but the commercial side is not as customer friendly, Wynn said. Insurance is often paid in one lump sum annually, though, 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 break up those commercial payments into monthly installments.
“Insurance carriers continue to focus on annual payments because they don’t have a choice,” he added. “They want all of their money up front so they can invest it. Our platform not only reduces the friction with payments by enabling customers to pay how they want to pay, but also helps carriers sell more insurance.”
Ascend app
Startups like Ascend aiming to disrupt the insurance industry are also attracting venture capital, with recent examples including Vouch and Marshmallow, which raised close to $100 million, while Insurify raised $100 million.
Wynn sees other companies doing verticalized payment software for other industries, like healthcare insurance, which he says is a “good sign for where the market is going.” This is where Wynn believes Ascend is competing, though some incumbents are offering premium financing, but not in the digital way Ascend is.
He intends to deploy the new funds into product development, go-to-market initiatives and new hires for its locations in New York and Palo Alto. He said the raise attracted a group of angel investors in the industry, who were looking for a product like this to help them sell more insurance versus building it from scratch.
Having only been around eight months, it is a bit early for Ascend to have some growth to discuss, but Wynn said the company signed its first customer in July and six more in the past month. The customers are big digital insurance brokerages and represent, together, $2.5 billion in premiums. He also expects to get licensed to operate as a full payment in processors in all states so 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 the technology to be more efficient with their operations, Wynn said.
“Brokers are here to stay,” he added. “What will happen is that brokers who are tech-enabled will be able to serve customers nationally and run their business, collect payments, finance premiums and reduce backend operation friction.”
Bill Trenchard, partner at First Round Capital, met Wynn while he was still with Sheltr. He believes insurtech and fintech are following a similar story arc where disruptive companies are going to market with lower friction and better products and, being digital-first, are able to meet customers where they are.
By moving digital payments over to insurance, Ascend and others will lead the market, which is so big that there will be many opportunities for companies to be successful. The global commercial insurance market was valued at $692.33 billion in 2020, and expected to top $1 trillion by 2028.
Like other firms, First Round looks for team, product and market when it evaluates a potential investment and Trenchard said Ascend checked off those boxes. Not only did he like how quickly the team was moving to create momentum around themselves in terms of securing early pilots with customers, but also getting well known digital-first companies on board.
“The magic is in how to automate the underwriting, how to create a data moat and be a first mover — if you can do all three, that is great,” Trenchard said. “Instant approvals and using data to do a better job than others is a key advantage and is going to change how insurance is bought and sold.”
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Virtual meeting platform Vowel raises $13.5M, aims to cure meeting fatigue
Meetings are an inevitable part of the work day, but as workplaces became more distributed over the past 18 months, Vowel CEO Andy Berman says we are steadily moving toward “death by meeting.”
His virtual meeting platform is the latest to receive venture capital funding — $13.5 million — with the goal of making meetings more useful before, during and after.
Vowel is launching a meeting operating system with tools like real-time transcription; integrated agendas, notes and action items; meeting analytics; and searchable, on-demand recordings of meetings. The company has a freemium business model and will also be rolling out a business plan this fall for $16 per user per month. Extra features will include advanced integrations, security and admin controls.
The Series A was led by David Hornik of Lobby Capital, who was joined by existing investors Amity Ventures and Box Group and a group of individual investors, including Calendly CEO Tope Awotona, Intercom co-founder Des Traynor, Slack VP Ethan Eismann, former Yammer executive Viviana Faga, former InVision president David Fraga and Okta co-founder Frederic Kerrest.
Prior to starting Vowel, Berman was one of the founders of baby monitor company Nanit. The company had teams spread out around the world, and communication was tough as a result. In 2018, the company went looking for a tool that would work for synchronous and asynchronous meetings, but there were still a lot of time zones to manage, he said.
Taking a cue from Nanit’s own baby monitors that were streaming video over 17 hours a day, the idea for Vowel was born, and the company began to focus on the hypothesis that distributed work would be prevalent.
“People initially thought we were crazy, but then the pandemic hit, and everyone was learning how to work remotely,” Berman told TechCrunch. “As we now go back to hybrid work, we see this as an opportunity.”
In 2017, Harvard Business Review reported that executives spent 23 hours in meetings each week. Berman now estimates that the average worker spends half of their time each week in meetings.
Vowel is out to bring Slack, Figma and GitHub components to meetings by recording audio and video that can be paused at any time. Users can add notes and see where those notes fall within a real-time transcription that enables people who arrive late or could not make the meeting to catch up easily. After meetings are over, they can be shared, and Vowel has a search function so that users can go back and see where a particular person or topic was discussed.
The new funding will enable the company to grow its team in product, design and engineering. Vowel plans to hire up to 30 new people over the next year. The company recently closed its beta test and has amassed a 10,000-person waitlist. The public launch will happen in the fall, Berman said.
Workplace productivity and office communication tools are not new concepts, but as Berman explained, became increasingly important when homes became offices over the past 18 months.
Competitors took different approaches to solving these problems: focusing on video conferencing or audio or meeting management with plugins. Berman says an area where many have not succeeded yet is integrating meetings into the typical workflow. That’s where Vowel comes in with its “meeting OS,” he added.
“Our goal is to make meetings more inclusive and worthwhile, which includes the prep, the meeting and the follow-up,” Berman said. “We see the future will be about knowledge management, so the difference between what we are doing is ensuring you can catch up quickly and keep that knowledge base. A Garner report said that 75% of workplace meetings will be recorded by 2025, and that is a trend we are reinventing from the ground up.”
David Hornik, founding partner at Lobby Capital, said he became acquainted with Vowel from its existing investor Amity Ventures. Hornik, who sits on the GitLab board, said GitLab was one of the largest distributed companies in the tech space, prior to the pandemic, and saw first-hand the challenge of making distributed teams functionable.
When Hornik heard about Vowel, he said he “jumped quickly” on the opportunity. His firm typically invests in platform businesses that have the capacity to transform business spaces. Many are pure software, like Splunk or GitLab, while others are akin to Bill.com, which transformed how small businesses manage financial operations, he added.
All of those combine into a company, like Vowel, especially given the company’s vision for a meeting OS to transform a meeting space that hadn’t moved forward in decades, he said.
“This was quickly obvious to me because my day is meetings — an eight-Zoom day is a normal day — I just wish I could remember everything,” Hornik said. “Speaking with early customers using the product, when I asked them what they would do if this ever went away, the first thing they said was ‘cry,’ and, because there was no alternative, would return to Zoom or other tools, but it would be a big setback.”
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New York’s David Energy has raised $4.1 million to ‘build the Standard Oil of renewable energy’
“We intend to build the Standard Oil of renewable energy,” said James McGinniss, the co-founder and chief executive of David Energy, in a statement announcing the company’s new $19 million seed round of debt and equity funding.
McGinniss’ company is aiming to boost renewable energy adoption and slash energy usage in the built environment by creating a service that operates on both sides of the energy marketplace.
The company combines energy management services for commercial buildings through the software it has developed with the ability to sell energy directly to customers in an effort to reduce the energy consumption and the attendant carbon footprint of the built environment.
The company’s software, Mycor, leverages building demand data and the assets that the building has at its disposal to shift user energy consumption to the times when renewable power is most available, and cheapest.
It’s a novel approach to an old idea of creating environmental benefits by reducing energy consumption. Using its technology, David Energy tracks both the market price of energy and the energy usage by the buildings it manages. The company sells energy to customers at a fixed price and then uses its windows into energy markets and energy demand to make money off the difference in power pricing.
That’s why the company needed to raise $15 million in a monthly revolving credit facility from Hartree Partners. So it could pay for the power its customers have bought upfront.
Image Credits: Getty Images
There are a number of tailwinds supporting the growth of a business like David Energy right now. Given the massive amounts of money that are being earmarked for energy conservation and energy efficiency upgrades, companies like David, which promise to manage energy consumption to reduce demand, are going to be huge beneficiaries.
“Looking at the macro shift and the attention being paid to things like battery storage and micro grids we do feel like we’re launching this at the perfect time,” said McGinniss. “We’re offering [customers] market rates and then rebating the savings back to them. They’re getting the software with a market energy supply contract and they are getting the savings back. Bringing that whole bundled package together really brings it all together.”
In addition to the credit facility, the company also raised $4.1 million in venture financing from investors led by Equal Ventures and including Operator Partners, Box Group, Greycroft, Sandeep Jain and Xuan Yong of RigUp, returning angel investor Kiran Bhatraju of Arcadia and Jason Jacobs’ recently launched My Climate Journey Collective, an early-stage climate tech fund.
“Renewable energy generators are fundamentally different in their variable, distributed, and digitally-native nature compared to their fossil fuel predecessors while customer loads like heating and driving are shifting to electricity consumption from gas. The sands of market power are shifting and incumbents are poorly-positioned to adapt to evolving customer needs, so there’s a massive opportunity for us to capitalize.”
Founded by McGinniss, Brian Maxwell and Ahmed Salman, David Energy raised $1.5 million in pre-seed financing back in March 2020.
As the company expands, its relationship with Hartree, an energy and commodities trading desk, will become even more important. As the startup noted, Hartree is the gateway that David needs to transact with energy markets. The trader provides a balance sheet for working capital to purchase energy on behalf of David’s customers.
“Renewables are causing fundamental shifts in energy markets, and new models and tools need to emerge,” said Dinkar Bhatia, co-head of North American Power at Hartree Partners. “James and the team have identified a significant opportunity in the market and have the right strategy to execute. Hartree is excited to be a commodity partner with David Energy on the launch of the new smart retail platform and is looking forward to helping make DE Supply the premier retailer in the market,” said McGinniss.
David now has retail electricity licenses in New York, New Jersey and Massachusetts and is looking to expand around the country.
“David Energy stands to reinvent the way that hundreds of billions of dollars a year in energy are consumed,” said Equal Ventures investor Rick Zullo. “Business model creativity and finding ways to change user behavior with new models is just as important if not more important than the technology innovation itself.”
Zullo said his firm pitched David Energy on leading the round after years of looking for a commercial renewable energy startup. The core insight was finding a service that could appeal not to the new construction that already is working with top-of-the-line energy management systems, but with the millions of square feet that aren’t adopting the latest and greatest energy management systems.
“Finding something that will go and bring this to the mass market was something we had been on the hunt for really since the inception of Equal Ventures,” said Zullo.
The innovation that made David attractive was the business model. “There is a landscape of hundreds of dead companies,” Zullo said. “What they did was find a way to subsidize the service. They give away at low or no cost and move that in with line items. The partnership with Partree gives them the opportunity to be the cheapest and also the best for you and the highest margin regional energy provider in the market.”
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Dog food startup Sundays launches its air-dried kibble alternative
Michael Waxman, co-founder and CEO of dog food startup Sundays, acknowledged that dog owners have no shortage of options when it comes to feeding their beloved pets — but he still thinks there’s room for something new.
“There’s a sort of ‘Water everywhere, but not a drop to drink’ phenomenon,” Waxman said. “There are over 3,000 dog foods, and yet I think there isn’t really one that is the no-brainer, compelling answer.”
Sundays “soft launched” its first product in February and now has around 1,000 paying customers. It’s launching more broadly today and is also announcing that it has raised $2.27 million in funding from Red Sea Ventures, Box Group, Great Oaks Ventures, Matt Salzberg, Zach Klein and others.
Waxman’s past startups include dating app Grouper, while his wife/co-founder Tory Waxman is a veterinarian (and serves as the startup’s chief veterinary officer). He told me that the two of them became interested in pet food a couple years ago when one of their dogs started to have stomach issues, and they “went down this rabbit hole of trying to find the best dog food.”
The market can be divided two broad categories, Waxman said. There’s kibble, which is relatively cheap and affordable but not as healthy. Then there’s refrigerated food, including direct-to-consumer options like The Farmer’s Dog, which are healthier but also pricier and require more preparation.
“Those are so unbelievably inconvenient,” Waxman argued. “You’re not going to find too many people crazier about their dogs than we are, and we would do literally anything for our dogs — except prepare their food for an hour a day.”
Image Credits: Sundays
So he’s pitching Sundays as a “new, third category of dog food between kibble and refrigerated.” It’s supposed to be human-grade dog food that’s 90% fresh meat, organs and bones, created through a unique air drying process.
For dog owners who rely on kibble, Waxman said the startup offers “a much higher-quality product that tastes much better and doesn’t compromise on the convenience that you’re used to,” while for owners who currently pay for refrigerated options, he promised “an all-around unbelievable increase in convenience, without any compromise in quality and taste.”
Several early customers compared the food to beef jerky in their reviews. Waxman added that in taste tests, dogs preferred Sundays to premium kibble 40-to-0.
The food is available for both one-time and subscription purchase. A single 40-ounce box currently costs $75, while the same box costs $59 via subscription.
Waxman suggested that it hasn’t been easy getting to this point — with a new process for creating dog food, “there were no supply chains set up for this.” Ultimately, he said Sundays selected a “USDA-monitored jerky kitchen in the U.S. to create this new form factor.”
“It took us much longer than we expected,” he admitted. “However, the short-term headache is a long-term feature that we’re really excited about. Ultimately, it should serve as a pretty deep moat to prevent would-be competitors from offering similarly high quality and differentiated products.”
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