Breathe Life, the Montreal startup that has developed a software-as-a-service (SaaS) platform for insurance carriers, has raised $11.5 million CAD to further enhance its offering.
The $11.5 million includes an all-equity $6.5 million Series A round that was co-led by new investor Investissement Québec and Real Ventures, which took part in Breathe Life’s seed financing.
Diagram Ventures, which led the startup’s seed round, also participated in the Series A, alongside Clocktower Technology Ventures, Cameron Ventures, Desjardins, and the venture capital arm of National Bank, NAventures.
“At the end of the day, for us, [COVID-19 is] kind of a blessing in disguise.”
– Ian Jeffrey, CEO of Breathe Life
The remaining $5 million is made up of $4.2 million in debt from the National Bank of Canada’s Technology and Innovation Banking Group and additional debt from various government grant programs, such as IRAP and provincial programs in Quebec. Notably, Breathe Life has been connected to National Bank since 2018 when the startup secured a partnership with National Bank Insurance to develop online life insurance distribution solutions.
Ian Jeffrey, CEO and co-founder of Breathe Life, told BetaKit that while the startup had begun fundraising prior to COVID-19, a lot of the new investors in the round are ones he has only ever met virtually.
Guy LeBlanc, president and CEO of Investissement Québec, noted that the “current global context” has increased the need to develop digital services in all sectors. He added that Investissement Québec believes Breathe Life “will play an important role” in bringing that type of innovation to the insurance industry.
Breathe Life was founded in January 2018 by Arach Tchoupani (CTO), Jean-Nicholas Hould (chief data officer), Sébastien Malherbe (CPO), and Jeffrey. It provides life and health insurance carriers with a platform to support their operations. According to Breathe Life, it has developed a “modern end-to-end platform” that increases the speed of policy delivery and can reduce operational costs.
The $11.5 million in debt and Series A equity funding brings Breathe Life’s total capital to date to $16 million. The latest financing follows a $4.5 million CAD seed round that the startup announced in February 2019.
Following that initial injection of capital, Breathe Life brought its first product to market in May of last year. The offering comprised a white-label B2C solution that helps carriers and agencies sell direct to consumers online.
“We’re really doing something that is different in this industry. In the insurance industry things are … it’s so old school,” said Jeffrey, calling Breathe Life’s product “quite innovative.”
Breathe Life is among a number of Canadian startups interested in tackling an industry that has been called archaic and less agile in comparison to other financial services sectors. Toronto-based Finaeo has developed a platform connecting carriers, brokers and clients, with companies like ProNavigator and Zensurance also operating in the B2B space, and PolicyAdvisor creating its own insurance buying platform.
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While the insurance industry has historically been slow to adopt technological changes, COVID-19 forced many insurance companies’ hands. “When COVID hit, obviously, as everyone, we kind of freaked out. No one saw it coming,” Jeffery told BetaKit. “But at the end of the day, for us, it’s kind of a blessing in disguise.”
The CEO noted that COVID-19, which has compelled many into remote and socially distanced work, is putting pressure on its insurance carrier clients to digitally transform.
“Now they have this massive sense of urgency. Because the way that things were being done – the old way, you know, face to face kitchen table discussions – can’t happen right now,” said Jeffrey. “And so, [carriers] really need technology like ours to enable their producers, those who sell the product, to sell remotely.”
“We believe we found product-market fit, and it’s showing in the discussions that we’re having.”
Jeffrey added that amid the pandemic Breathe Life has seen its sales opportunities increase in Canada and the United States. “We actually think it’s a really positive impact on our business so far, and I think it will in the next 12 to 18 months as well,” he said.
Breathe Life, which works with financial institutions and life insurance carriers, says it has processed 100,000 applications on its platform since it launched. The startup plans to use its latest capital to invest in its go-to-market strategy as well as increasing its sales.
“We believe we found product-market fit, and it’s showing in the discussions that we’re having,” Jeffrey stated. “It’s showing most importantly in the usage of the software and the value that our clients have seen.”
The startup also plans to use the $11.5 million to invest “heavily,” Jeffrey told BetaKit, in its tech platform in order to onboard more clients. Currently, Breathe Life is able to onboard new clients within a 10 to 12 week period, something Jeffrey called “lightning fast” for the insurance industry “but not fast enough” for the tech sector.
The Montreal startup is also continuing to pursue its United States expansion plan, which it expressed was a focus last year following its seed raise. Breathe Life recently hired its first full-time employee in the US and is gearing up to hire for three more sales roles in the region.
To meet its goals, Breathe Life is looking to grow its 37-person team to an additional 10 to 15 employees by the end of the year.
“Everything that has happened this momentous year has raised the stakes for carriers, forcing them to quickly and effectively modernize their operations to meet the pressing financial-security needs of billions of consumers worldwide,” said Jeffrey. “Helping consumers engage online – and making it easy for advisors to help them there – is no longer a ‘nice to have,’ but an urgent requirement of the new normal.”
Image source Breathe Life via Glassdoor