Montréal-based YouSet has raised $3.5 million CAD in seed financing, coinciding with the launch of a new product offering aimed at helping consumers bundle insurance policies.
The insurance marketplace startup raised all of its funding from angel investors via a simple agreement for future equity. Previous investors from YouSet’s 2022 pre-seed raise of $2.1 million CAD led the latest round, which included former Intact executive vice-president Don Fox, former Marsh managing director Neil Mitchell, Canavan Capital principal Joe Canavan, and DuProprio founder Nicolas Bouchard.
“The part that I personally am most proud of is the quality of investors we got.”
Xavier Freeman
New investors in the all-primary round include the former Axa head of big data Jim Texier, former Aviva senior vice-president Phil Gibson, and serial entrepreneur and investor Dan Robichaud.
In an interview with BetaKit, co-founder and CEO Xavier Freeman said the company chose to pursue angel investors who have either deep experience in the insurance space or with helping other tech companies scale and exit, rather than pursuing institutional investors.
“Having the investors from the last round reinvest, they were able to introduce us to strategic angel investors within their network, which made it possible to close the round in a really efficient manner without us having to go towards institutional investors just yet,” he said.
“The part that I personally am most proud of is the quality of investors we got,” he said.
A recent report by the Canadian Venture Capital and Private Equity Association on startup deal flows showed pre-seed and seed-stage companies experienced the steepest declines in investment dollars across all stages in the first half of 2024, falling 64 percent and 45 percent, respectively.
Because YouSet was able to grow the business through the tech downturn and financiers from the previous round reinvested, Freeman said that instilled confidence in new investors, allowing his company to buck the trend amid a tough fundraising environment.
It took the startup two months to secure the oversubscribed round, closing the financing in early July, Freeman said. YouSet was able to grow its user base from 75,000 two years ago to 250,000 this year and double the size of its team to 20, he added.
Founded in 2017, YouSet is a licenced insurance broker with an online platform that allows consumers to compare auto, home, and renter insurance policies from more than 50 distribution partners. The company says users fill out a questionnaire online, and claims that in four minutes or less, they can compare rates from major insurers and save nearly 30 percent on policies on average.
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As part of the most recent funding round, the company’s latest product allows users to bundle policies from different insurers, such as Aviva, Intact, and Economical Insurance, and purchase a policy directly on YouSet’s platform. When asked why other insurance companies would want to bundle their products with other providers, Freeman said YouSet gives incumbents access to “high quality customers they would not be able to get on their own.”
Freeman said YouSet’s platform solves the painstaking issue of spending hours manually comparing policies online or calling multiple insurance providers to find the best coverage. As a licenced broker, the company generates revenue through commissions on the policies it sells and doesn’t charge to use its platform, Freeman said.
YouSet is currently licenced in Québec and Ontario, but plans to operate in Alberta and British Columbia by the end of next year. The company will use the funding to expand the sales, customer service, and marketing teams, as well asgrow its network of distribution partners.
“We would like to be the first place people go when they think about insurance,” Freeman said.
Feature image courtesy YouSet.