Branch Raises $50M to Revolutionize Insurance with API

Branch Insurance Secures $50 Million in Series B Funding

Branch Insurance, a company specializing in combined home and auto insurance solutions, has successfully completed a $50 million Series B funding round. Anthemis Group spearheaded the investment.

Investment Details and Previous Funding

Acrew, Cherry Creek Holdings, and a group of existing investors – including Greycroft, HSCM Bermuda, American Family Ventures, SignalFire, SCOR P&C Ventures, Foundation Capital, and Tower IV – also contributed to this funding round. Since its establishment in 2017, the Columbus, Ohio-based company has now accumulated a total of $82.5 million in funding.

Differentiating Factors in a Competitive Market

The insurtech sector is notably crowded. Branch distinguishes itself by providing customers with “instant insurance quotes” for bundled home and auto coverage “in seconds,” requiring only minimal information.

Leadership and Founding Story

Steve Lekas, co-founder and CEO, initiated his career at Allstate, gaining experience in underwriting, technology, and product management. He subsequently led the development of Esurance’s initial online home insurance offering.

Driven by a desire to broaden access to insurance, Lekas collaborated with Joe Emison to establish Branch.

Addressing Industry Flaws

“The existing insurance landscape is fundamentally flawed, often disadvantaging consumers,” stated Lekas. “Complex policies, escalating costs, and aggressive marketing tactics contribute to a cycle of inflated insurance prices.” He further emphasized, “We operate as a full-stack insurance provider, redefining how individuals perceive their home and auto insurance needs.”

Technological Advantages and Integration

Branch asserts its position as the sole insurance company capable of binding policies via an API. Furthermore, it is the only provider currently offering the ability to bundle auto and home insurance within a single transaction.

A key differentiator for Branch lies in its capacity for seamless integration into existing purchasing processes. The company has forged partnerships with organizations like Rocket Mortgage and ADT, enabling insurance to be offered at the point of sale within their respective products.

branch raises $50m to offer bundled auto & home insurance via an api

“Insurance invariably follows another transaction,” Lekas explained. “It has never previously been feasible to integrate it directly into that initial purchase.”

Cost Efficiency and Distribution Model

This unique distribution strategy allows Branch to reduce customer acquisition costs, enabling the company to offer more competitive premium pricing.

“With just two clicks, customers can secure home and auto insurance, or simply home insurance, and we will handle the cancellation of their existing policy and transfer all necessary data to their mortgage provider,” Lekas noted.

Branch also distributes its insurance products directly to consumers and through agency partnerships.

Expansion Plans and Regulatory Hurdles

The newly acquired capital will be allocated, in part, to expedite Branch’s expansion across the United States, facilitating the establishment of additional integration partnerships. Currently, Branch maintains over 30 partnerships of varying scales and is actively “adding more each week” as it expands its operational footprint.

“Rapid growth presents significant challenges,” Lekas acknowledged. “The regulatory framework is designed to promote deliberate progress. Each state regulator independently assesses and approves applications based on its own specific rules.”

Lekas anticipates that Branch will be operational in over 80% of the U.S. market before the end of the current year.

Growth Trajectory Since Series A

Branch has experienced substantial growth since its $24 million Series A funding round in July 2020.

The company reports a 435% increase in its partner channel, a 660% growth in active policies, and a 734% surge in active premium within a year of its previous funding round.

Anthemis Group’s Investment Rationale

Ruth Foxe Blader, Partner at Anthemis Group, highlighted that Branch represents the firm’s inaugural investment from its new growth fund.

Blader, with a decade of experience in insurance innovation, is particularly drawn to insurtech companies demonstrating significant advancements in technology, product development, and company culture.

“Branch demonstrably fulfills these criteria,” Blader stated. “Its bundled and embedded products offer increased affordability and convenience, while minimizing the risk of coverage gaps for customers.”

She added that the startup effectively leverages data science and technology to create “distinctive, automated product packages.”