Former Shopify employees raise $20 million CAD for insurtech startup Cover

Cover

San Francisco-based Cover—which was founded by Canadians and former Shopify employees Karn Saroya and Anand Dhillon—has closed a $20 million CAD round.

The round was led by Tribe Capital with participation from Y Combinator, Social Capital, Exor, and Samsung. The new round of funding will be used to scale the team and expand its insurance product offerings.

“Cover is in a class of their own among insurtechs,” said Arjun Sethi, lead investor and partner at Tribe Capital. “They have clear product-market fit and the team has repeatedly proven that they can deliver the step function increase in the insurance experience consumers need and deserve.”

Cover’s app recommends insurance providers when users send a photo of an item such as a car, electronics, jewellery, or a pet. In a statement to BetaKit, CEO Saroya said he doesn’t consider other insurtechs as competition to its marketplace; often, it hosts their products within the Cover app.

The company’s previously announced funding round was in July 2017, when it raised an $8 million Series A.
 

“Most insurance apps are wrappers around very clunky web experiences built more than a decade ago,” Saroya said. “There aren’t any insurance companies on Earth that are building computer vision via Tensorflow into their apps or leveraging the unique insights that sensors on device produce to price their insurance policies. We underwrite and filter for bad risks better, and our customers benefit with better rates and easier claims process. Most carriers remain staunchly brick-and-mortar for commoditized products.”

The next generation of Cover’s app includes a new tool called Shopify Warranties—which allows Cover to distribute its warranty products at point of sale through Shopify—and the release of Cover Driving School, which helps users find discounted auto insurance rates. Saroya said the team focused on auto insurance as 80 percent of its insurance requests are in the auto industry.

“The technology we’re building into our apps allows us to underwrite better and eventually offer even more competitive pricing,” said Saroya.

The company’s previously announced funding round was in July 2017, when it raised an $8 million Series A. It plans to expand across the US, where it hosts 30 carriers across 49 states, and eventually come into Canada. Saroya and Dhillon said they thought of the idea to launch Cover after their experience running Toronto-based StyleKick.

“There was a lack of transparency in pricing, week-long turnarounds, disengaged ‘advisors,” said Saroya. “We set out to build an insurance entity that simplified getting insurance, helped our customers understand the policies they bought and are there in an advisory capacity whenever they needed via the app. An added benefit is we get to build sexy products in an unsexy space.”