Ascend Raises $5.5M for BNPL in Commercial Insurance

Ascend Secures $5.5 Million in Seed Funding for Insurance Payment Innovation

Ascend, a company focused on modernizing insurance payments, has announced the successful completion of a $5.5 million seed funding round. This investment will be used to accelerate the development of its platform, which integrates financing, collections, and payables.

Investment Details and Key Backers

First Round Capital spearheaded the funding round, with significant participation from Susa Ventures, FirstMark Capital, and Box Group. A notable group of angel investors also contributed, including Joshua Motta, CEO of Coalition, and executives from Newfront Insurance, Vouch Insurance, Layr Insurance, Anzen Insurance, Counterpart Insurance, Bunker Insurance, and SageSure.

Automating Insurance Payments with Innovative APIs

Ascend is currently operational in 20 states and has developed specialized payment APIs. These APIs are designed to fully automate insurance payment processes. Furthermore, the platform introduces a "buy now, pay later" (BNPL) financing option for commission distribution and carrier payables, a feature co-founder and co-CEO Andrew Wynn identifies as unique within the commercial insurance sector.

From Sheltr to Ascend: Addressing a Critical Industry Need

Andrew Wynn and Praveen Chekuri founded the company in January 2021, building upon their prior collaboration at Instacart. Previously, they established Sheltr, a service connecting customers with maintenance professionals, which was later acquired by Hippo in 2019. Their experience revealed a gap in the insurance industry – despite modernization efforts, outdated payment processes continued to hinder customer experiences.

The Persistence of Paper Checks and Complex Payment Flows

The insurance industry still heavily relies on traditional methods, processing approximately 600 million paper checks annually. Wynn describes insurance payments as a complex network, often taking up to 100 days for funds to reach the carrier due to numerous intermediaries. Insurance companies often rely on investment income generated from these held payments to maintain profitability.

Expanding Payment Options for Commercial Insurance

While payment plans are common for home and auto insurance, commercial insurance typically requires annual lump-sum payments. Ascend addresses this by offering point-of-sale financing, enabling brokers to divide commercial insurance premiums into manageable monthly installments.

Empowering Carriers and Brokers Through Flexible Payments

Wynn explains that insurance carriers prioritize annual payments to maximize investment opportunities. Ascend’s platform aims to alleviate this constraint by facilitating customer-preferred payment methods while simultaneously helping carriers increase sales volume.

A Growing Trend: Venture Capital in Insurtech

Ascend is part of a growing trend of insurtech startups attracting venture capital. Recent examples include Vouch and Marshmallow, which collectively raised nearly $100 million, and Insurify, securing $100 million in funding.

Competing in a Developing Market

Wynn observes the emergence of verticalized payment software in other sectors, such as healthcare insurance, as a positive indicator of market direction. Ascend positions itself within this competitive landscape, differentiating itself from existing premium financing options through its digital-first approach.

Future Plans: Product Development and Expansion

The newly acquired funds will be allocated to product development, go-to-market strategies, and expanding the team at its New York and Palo Alto locations. The company also benefited from attracting a group of industry angel investors seeking a solution to enhance their insurance sales capabilities.

Early Traction and Growth Potential

Although recently launched, Ascend has already secured its first customer in July and added six more in the following month. These initial clients, representing $2.5 billion in premiums, are leading digital insurance brokerages. The company plans to obtain full payment processor licenses in all states by year-end.

Focus on Broker Empowerment, Not Replacement

Wynn emphasizes that Ascend’s goal is not to displace brokers but to provide them with technology that streamlines their operations.

He believes that tech-enabled brokers will be able to serve customers nationally and improve efficiency in areas like payment collection, premium financing, and backend operations.

First Round Capital’s Perspective on Ascend’s Potential

Bill Trenchard, a partner at First Round Capital, first encountered Wynn during his time at Sheltr. He recognizes the parallels between insurtech and fintech, where disruptive companies are gaining traction through lower friction, superior products, and a digital-first approach.

A Massive Market Opportunity

Trenchard believes that Ascend and similar companies are poised to lead the transition to digital payments in the insurance industry, a market valued at $692.33 billion in 2020 and projected to exceed $1 trillion by 2028.

Key Investment Criteria and Ascend’s Strengths

First Round Capital prioritizes team, product, and market when evaluating investments. Trenchard highlights Ascend’s rapid momentum in securing early customer pilots and attracting prominent digital-first companies as key strengths.

“The ability to automate underwriting, establish a data advantage, and be a first mover are crucial,” Trenchard stated. “Instant approvals and data-driven insights will fundamentally change how insurance is purchased and sold.”