The cheapest insurance policies are the hardest ones to sell profitably, and a Minneapolis startup has raised $27M on that premise.
Slingshot Insurance came out of stealth with a seed round co-led by Rally Ventures and Skyward Group. Insurance veterans participated, including Jim Hays, who joins the board. Rally did more than write a cheque: it co-founded the company, one of roughly eight it has helped launch.
A nickel-and-dime business
Embedded coverage is bought alongside something else, such as a policy offered while booking a flight. Premiums often land near $25, and the paperwork, insurer coordination and potential claims behind each one can swallow the margin.
Slingshot’s software links the companies selling coverage to the insurers backing it, using AI to move data between them and replacing the spreadsheets and email chains that make small programmes uneconomic. It charges a 5% technology fee.
Its first design partner is Vertical Insure, which serves more than 750,000 customers at an average premium of $25, and the first programme launches this month. Chief executive Ethan Genteman, a first-time founder, runs a team of six that began operating on July 1.
Slingshot earns its money as a technology provider for now. It is also pursuing an acquisition of a carrier so it can back policies itself, a move that would turn a software vendor into a risk bearer.
