Ladder Raises $100M at $900M Valuation

Life Insurance Innovation Fueled by Insuretech: Ladder Secures $100 Million

The life insurance sector is experiencing revitalization through the influence of insuretech, and Ladder, a company dedicated to reimagining the entire insurance process – from identifying target demographics to provisioning, payment, and coverage levels – has recently announced a significant funding round following substantial growth.

Ladder, which offers adaptable term life insurance policies with coverage options spanning from $100,000 to $8 million, has successfully raised $100 million in equity funding. This Series D round establishes the company’s valuation at $900 million.

Strong Revenue Growth and Market Position

In a period where awareness of mortality has increased – notably influenced by the COVID-19 pandemic – Ladder has demonstrated impressive performance, achieving a four-fold increase in revenue (the precise figure remains confidential).

The Palo Alto-based startup, currently operating solely within the U.S., is projected to provide $30 billion in coverage by the year's end.

The company’s current valuation reflects this growth; PitchBook estimates a valuation of approximately $238 million during its previous funding round in 2020.

Investment Details and Backers

Thomvest Ventures and OMERS Growth Equity jointly led the Series D funding round. The specific details regarding other participants in this round have not been disclosed.

Ladder’s existing investors include strategic partners such as the venture capital arms of Allianz Life and Northwestern Mutual, alongside RRE, Canaan Partners, Lightspeed, and other prominent firms.

The Rise of Insurtech Startups

Over the past few years, a surge of startups has emerged, aiming to redefine the traditional insurance model. These companies are capitalizing on trends similar to those observed in fintech.

They are leveraging pre-built technology and integrating functionality through APIs to empower individuals to locate and obtain insurance policy quotes.

Key Advantages of New Insurance Platforms

These new platforms offer several distinct advantages:

User-Friendly Interfaces: Easier navigation via web and mobile applications.
Expanded Options: A broader spectrum of pricing and coverage choices.
Accelerated Processes: Utilizing algorithms and advanced technologies to expedite quote generation, policy finalization, and coverage initiation.

Targeting New Customer Segments

Many of these companies are focusing on previously underserved demographics. Examples include Hedvig in Europe, which caters to individuals under 30, Lemonade, Marshmallow in the U.K. focusing on inclusive car insurance, YuLife offering gamified, wellness-focused life insurance, Bima targeting emerging markets, and Ethos simplifying access to life insurance products.

Ladder’s Vertically Integrated Approach

Ladder’s strategy, offering flexible term policies available for online search and purchase, aligns with many of these innovative approaches. However, a key differentiator is its vertical integration.

The company develops not only intuitive interfaces and risk-assessment algorithms but also manages underwriting, instant policy issuance, and policy administration internally.

Benefits of Vertical Integration

While vertical integration may entail increased operational complexity, it potentially grants Ladder greater control over policy design, updates, and long-term profitability, as well as the ability to offer cost savings to customers.

Ladder currently asserts that its users experience 40% savings compared to other providers in the market.

Statements from Leadership

“I know first hand how life insurance can change a life,” stated Jamie Hale, CEO and co-founder of Ladder. “With our carrier in operation and this new round of funding, we are in the position to greatly accelerate innovation in service of families and communities. I am so excited to see our original vision continue to materialize.”

Don Butler, MD at Thomvest Ventures, commented, “The world is only becoming more digital, not less, and the life insurance industry to-date has been slow to modernize. We are excited to invest in Ladder’s vision to build the digital life insurance company of tomorrow, and their announcement today that they are the first in operation shows that they are outpacing the industry.”

Saar Pikar, MD and fintech lead at OMERS Growth Equity, added, “Jamie Hale and his visionary management team are building Ladder into an innovative, market-leading digital life insurance company. We are very pleased to count Ladder as OMERS Growth Equity’s first direct fintech investment – as well as our entry in the insurtech space, expanding on the insurtech presence established by our OMERS Ventures colleagues. We believe that the company offers a truly transformative approach, including through its efficient adjudication of risk and enhanced user experience.”