Ethos has raised $60 million in a Series C led by Google Ventures (GV), marking the digital life insurance company’s third round of funding in just over 14 months. As part of the new financing, Ethos is opening offices in Austin, Texas, and Singapore, with a focus on building out its engineering team in the Texas capital.
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Founded in 2016, Ethos says its mission is to make “modern, ethical life insurance” accessible to the masses through its proprietary technology.
The company claims it makes getting a life insurance policy “fast, easy and inexpensive” by “turning a process that was once like going to the DMV to more like shopping online.” It also claims to “prioritize people over profit,” which is refreshingly noble. Ethos is licensed in 49 states.
The San Francisco-based startup has attracted a bevy of investors in a relatively short amount of time. Existing investors Accel, Sequoia Capital, and Goldman Sachs also participated in the latest round, which brings the company’s total raised to $106.5 million. Ethos raised a $35 million Series B last October that was led by Accel, and an $11.5 million Sequoia-led Series A in June 2018.
Besides some of Silicon Valley’s most prominent VCs, Ethos has also raised capital from Stanford University, actor Robert Downey Jr.’s Downey Ventures, NBA player Kevin Durant’s Durant Company, Arrive, a subsidiary of Roc Nation, and actor Will Smith’s Smith Family Circle.
So, how does it work exactly? A prospective customer can apply and qualify for a policy in about 10 minutes, CEO and co-founder Peter Colis told Crunchbase News last October, without having to go through medical exams or blood tests—as most people do when applying through more traditional life insurance providers. That’s because the company applies data science and predictive analytics to determine an individual’s life expectancy, he said. He and his former Stanford University grad school roommate, Lingke Wang, previously founded secondary life insurance marketplace Ovid Corp.
GV general partner and Ethos board member Tyson Clark noted in a written statement that his firm has been “consistently impressed by the company’s commitment to growth, customer traction, and execution to date.” Indeed, Ethos says it’s quadrupled its revenue since last October (although it would not disclose the exact amount). Additionally, it is “insuring thousands of new families every month” and has “tens of thousands” of customers. Ethos currently has about 90 employees, compared to 35 at the time of its last raise in October.
“The nice thing is we have the majority of our money left over from the last round. So raising more money was not something we needed to do,” Colis told Crunchbase News. Rather, he added, it was more about being able to more optimally take advantage of market conditions. As for Austin, Colis said the city offered “great access to talent.”
“In general, there is a similar growth and entrepreneurial mindset going on in the city that is similar to what we see in San Francisco,” he told Crunchbase News. (Ethos joins a bunch of other companies that have either relocated to, or opened a secondary office in, Austin in recent years.)
The company plans to use its latest capital toward “continued momentum, supporting product refinement, technical team hires,” according to Colis.
Ethos is just one of a number of startups working to digitize the insurance industry. Last week, Sophia Kunthara reported that Ohio-based car insurance startup Root Insurance was set to raise $350 million in a funding round that would bring the company’s valuation to $3.65 billion. Like Root, Lemonade has also gained traction from investors looking to influence the user-led future of policy purchases. Also in July 2018, online small business insurance provider Next Insurance raised $83 million in a Series B round led by Redpoint Ventures.
Illustration: Li-Anne Dias