Ethos, a start-up that says it can process life insurance applications in a matter of minutes, has raised $35 million in a funding round led by Accel and backed by Google’s venture capital arm.
Existing investors Sequoia Capital and Arrive, the venture fund of U.S. rapper Jay Z’s entertainment firm Roc Nation, also participated in the funding round.
“The insurance sector is a $1 trillion industry that is still largely dependent on pen and paper, pushy salespeople, doctor office visits, and legacy systems, which is why we believe there is a tremendous opportunity to simplify the process through technology — and that’s exactly what Ethos has built,” Accel’s Niparko told CNBC in an email.
He highlighted other bets the firm has made on insurance technology start-ups like Shift Technology, which uses artificial intelligence to detect fraudulent insurance claims, and The Zebra, a car insurance marketplace.
“We believe that Ethos is the first player in the life insurance space that’s truly poised to make a difference in how Americans purchase and interact with their insurance provider,” Niparko added.
Ethos, which uses data analytics to predict a person’s life expectancy, says it is able to cut the time normally taken to apply for life insurance policies from 10 weeks to just 10 minutes, and that insurance claims are paid out “within weeks.” It also claims that more than 99 percent of its customers don’t require a medical exam or blood test in order to get a policy.
It provides term life insurance coverage, which lasts between 10 and 30 years. Ethos says this model is primarily targeted at people who are in the “prime” of their life, who are less likely to think about applying for life insurance.
The firm is partnered with century-old insurers Assurity Life Insurance Company and Munich Re to help it deliver insurance products to customers.
It’s a relatively little-known name in Silicon Valley, but Ethos has drawn the attention of some big-name investors. Just four months ago, the company raised $11.5 million in its first major round of investment, led by Sequoia Capital. The round was also backed by Robert Downey Jr.’s Downey Ventures and Will Smith’s family office Smith Family Circle.
Ethos said it saw “robust growth” this year, with a more than 400 percent jump in revenue, customers and applications in the last four months alone.