Funds from Jay Z, Kevin Durant and Will Smith Invest in Life Insurance Startup
Recently, life insurance startup, Ethos announced an $11.5M financing round led by Sequoia Capital, to make obtaining life insurance accessible and simple for everyone. Other investors in the round included a very star-studded cast. Amongst the list is, Stanford University, Arrive, a subsidiary of Roc Nation, Robert Downey Jr.’s Downey Ventures, Kevin Durant’s Durant Co., Will Smith’s Smith Family Circle, and a credit facility from Silicon Valley Bank.
According to a recent press release, Ethos has already acquired thousands of applicants for life insurance coverage and has been licensed in 49 states. The investment is set up to scale the company and allow the team to focus on product development. Sequoia Partner Roelof Botha will join the board of directors.
The release also states that while the U.S. economy, job market, and homeownership rates, wages, and the population as a whole continue to grow, life insurance policies sold in the U.S. are declining. More and more Americans are moving through life without it and in fact, the share of Americans with life insurance has fallen to less than 60%, from 77% in 1989.
Lack of knowledge is what can be attributed to the statistics. The process has been known to be extremely lengthy and confusing for consumers. Additionally, it is managed by agents who don’t necessarily have the client’s best interest at heart thus they are not in alignment with the customer’s needs. Due to this fact, tens of millions of families are going unprotected.
“Ten million new individual life policies are sold annually in the U.S., and Peter and Lingke have identified the opportunity to modernize their delivery and packaging for the next generation,” said Botha, a partner at Sequoia Capital. “Ethos is revolutionizing the insurance purchasing experience and we’re thrilled to partner with them as they create a simple way for consumers to provide for the people they love.”
Ethos has made the process much more seamless. It solves a lot of the pain points that consumers have had in the past. People can apply and qualify for a policy after a 10-minute application versus the 10 weeks it takes through a more traditional process. Additionally, the platform provides a non-commissioned licensed agent available to give unbiased guidance and unlike other life insurance plans, more than 99% of Ethos customers have required no medical exam or blood test to get a policy.(Image: Ethos)
“As an organization built on family-first principles, we admire Ethos’ mission to simplify life insurance and ultimately empower people to protect their families,” said Kosaku Yada, CEO of Smith Family Circle. “We’re focused on supporting ideas that positively impact people’s lives and we’re thrilled to help Ethos do that.”
The founders are an extremely experienced duo. Both Peter Colis and Lingke Wang worked together previously on Ovid Life, a life insurance marketplace. “Life insurance is about families, financial empowerment, and protection. Intrinsically, it is a good thing. But somewhere along the way, protecting profits, not people, became the industry’s passion.” said Peter Colis, CEO at Ethos. “We have the opportunity to rebuild a broken industry and put honesty at its core, ultimately expanding life insurance accessibility to the millions of US families who have college debt, mortgages, spouses, and children to care for, and who want to be financially empowered to live their lives without worry. We are proud to partner with Sequoia and our other investors on this mission.”
“Ethos is working to make life insurance more accessible and affordable for people, through transparency and technological efficiency,” said Neil Sirni, president of Arrive. “We’re excited to help them achieve that goal.”
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