SimplyInsured just announced a $750k seed funding round from well known investors such as Y Combinator, Altair Capital, Jake Gibson and Tim Chen (the founders of NerdWallet.com), Waseem Daher, Jeff Arnold, Amee and Adil Chaudry, Sam Melamed, and Matt Huang (read our news here). Vivek Shah, Co-founder and CEO, told us something more about the San Francisco-based startup.
FinSMEs: Hi Vivek, can you tell us something about you?
Vivek: I graduated from the Massachusetts Institute of Technology, and joined McKinsey & Company as a consultant out of college. At McKinsey I worked with insurance companies to make healthcare more efficient. After McKinsey, I joined a YC-backed startup called Cardpool, which was later acquired by Safeway.
FinSMEs: What’s SimplyInsured? Which market problem do you want to solve?
Vivek: SimplyInsured is Kayak for Health Insurance – a 100% online way to compare and purchase health insurance for small businesses. SimplyInsured seeks to provide a modern solution to small business health insurance. Over 6 million small businesses purchase health insurance via out-dated paper, phone, and fax systems. Traditional insurance brokerages, a $17 billion industry, still rely on older quoting tools and inefficient fax-based applications, creating a slow, inefficient, and frustrating experience for small business owners.
SimplyInsured brings the insurance buying process online, savings small businesses time and money. SimplyInsured’s clients have been able to save up to $1000 per employee in healthcare premiums without sacrificing coverage. As small businesses pay on average $5500 per employee for health insurance, this is a significant cost savings.
FinSMEs: How does it work?
Vivek: SimplyInsured’s technology can read any health insurance plan and convert the plan into a cost model, turning complex legalese into simple to understand cost comparisons. We model 100+ different medical scenarios against each plan, from a simple doctor’s visit to “getting hit by a bus”. Our algorithm mathematically ranks each plan on premium vs. coverage provided – providing an unbiased measure of the quality and value of each plan.
On the customer side, when a small business customer visits our site, they will get an immediate price quotes and easy to understand plan comparisons. By providing our customers with clear comparisons and helping them understand how much common medical procedures will actually cost out of pocket, they are able to pick the right coverage for their organization.
Once our customer selects a plan, the application process is 100% online and paperless. SimplyInsured makes the application process into an easy online process and automates all health insurance administration – including employee onboarding, payroll deductions, and other back office tasks.
FinSMEs: What’s the business model?
Vivek: SimplyInsured earns a recurring monthly commission for every group we sign up for insurance.
FinSMEs: Do you already have customers?
Vivek: Yes, and our recurring revenue has grown over 500% in the last 6 months.
FinSMEs: The team. Who is behind SimplyInsured?
Vivek: I and Bob Aspell went to school at the Massachusetts Institute of Technology (MIT), where we were housemates and studied Electrical Engineering and Computer Science. Previously, I was an early employee at Cardpool (YCombinator 2010) through their acquisition by BlackHawk Network in 2011. Before that I was a consultant in McKinsey’s Healthcare practice working with health insurance clients. Bob was previously with Sverica International as a senior associate, and consultant with Bain and Company.
FinSMEs: You are YC backed company? How was the live there? Is YC really special? Why?
Vivek: Yes – we went through the YCombinator program in Winter 2013. YCombinator is a fantastic company building experience – it is a forcing function to make your company grow. There isn’t any one specific element (talented and experienced mentors, good advice, environment of camraderie, access to the best investors) – it is a no bull culture of “Grow your company by 10% this week, okay?”
FinSMEs: You just raised funds. What about the investors? What do you expect from them apart money?
Vivek: We are really happy to have the talented and experienced investors join the SimplyInsured team. We have experienced startup founders, company builders, SEO experts, insurance experts, and serious technical chops amongst our investors – we are glad to have their varied and relevant advice to guide Simplyinsured.
FinSMEs: How do you intend to use the funds?
Vivek: The latest round will enable SimplyInsured to grow our sales and marketing, add to our product, and expand into new states.
FinSMEs: Future Plans?
Vivek: We are excited about where we are at and expect to continue growing our team. We think we are positioned well to grow in the health insurance space, and plan on continue building our team and business.
FinSMEs
04/10/2013