INSUBCONTINENT EXCLUSIVE:
“Move fast and break things” is a term we usually associate with Facebook (at least, until 2014) and the general startup ethos of being
Now, in true entrepreneurial fashion, the phrase is finding itself as the center of — what else — a startup itself, which today is
announcing a sizeable Series B as it gains traction.Vouch, which offers business insurance specifically targeting startups, is today
announcing a Series B of $45 million, led by Y Combinator’s Continuity Fund
The company was part of the YC cohort that presented this past August, and between then and now it appears to have also raised a Series A of
$24 million, with this Series B actually also closing back in September.PitchBook data indicates that Vouch’s valuation has also ramped up
rapidly: it’s currently at $210 million
Previous investors in the company include Ribbit Capital, SVB Financial Group, Y Combinator, Index Ventures, and 500 Startups, with the
total raised to date now at $70 million.The company — not to be confused with the tutoring network Vouch, nor the ‘social network for
loans’ Vouch — will be using the money that it will use to continue expanding its product and to bring the service to more
geographies.A case in point is that the company is also announcing the launch of its newest region, the state of California — perhaps one
reason for the delay in making this Series B public
It was already live in Oregon, Utah, Colorado, Illinois, Indiana, Ohio, Wisconsin and Michigan, but today’s move is a key one, considering
that Silicon Valley is at the heart of the tech world, and therefore startups, and therefore fertile ground for acquiring new customers.It
seems that although Vouch itself is based in San Francisco, it delayed a California launch in part to test out the product in smaller
markets before hitting the big time: California, it notes, accounts for 50% of the whole business insurance market in the US, and California
startups alone spend $44 billion annually on it.When Vouch launched at YC, founder Sam Hodges, who had been one of the original co-founders
of Funding Circle, the business lending platform that went public in London, described the platform’s mission as a way of mitigating risks
because sometimes “bad things happen to good startups.”Indeed, the company’s insurance covers all the tricky things that can befall
young businesses in what is a very volatile market
Common wisdom says that most fail, and some have estimated the failure figure to be as high as 90%, but even if that is possibly too high,
it underscores the many growing pains that a startup can encounter.Vouch’s cover includes general liability (which includes damage to
rented premises, personal or advertising injury, and related areas), business liability, management liability, fiduciary liability, cyber
and crime coverage, rented and non-owned auto insurance and more
(Health or workers’ compensation are not included.) The products start at $200/year, which Vouch says undercuts most of what is already on
Munich Re backs the policies.“Vouch helps founders manage the risks associated with starting up a new company, so they can focus on
creating and growing businesses that change the world
We believe that’s a purpose worth pursuing,” said Hodges in a statement
“As an entrepreneur, I’ve spent most of my career building companies at the intersection of technology and financial services
I know first-hand that along the journey of building and growing a business, teams will face numerous high-stakes challenges
Vouch is here to support entrepreneurs and mitigate those challenges from the beginning, leaving more room for growth.”Y Combinator has
always had a soft spot for startups that built services for startups, and this is no exception
It makes perfect sense as a follow-on investment from the Continuity fund, which has also backed Brex, Gusto, Instacart, LendUp, and Stripe
Given YC’s focus on encouraging talented founders and building startups, you could say that Vouch is something of a strategic investment
— not unlike one of Vouch’s other backers, Silicon Valley Bank, which tells startups that do business with it (including borrowing money
against the risk that they might fail) that Vouch is its preferred insurance provider.“Y Combinator and Vouch share a common goal –
giving founders the support they need to build successful, innovative companies,” said Anu Hariharan, Partner at Y Combinator Continuity,
“Vouch is built specifically for startups, so founders have the peace of mind that their business is covered
This platform is fundamental to the startup community, as it enables founders to focus on growing their companies — which is why we were
bullish on leading the Series B.”
