Melbourne O’Banion co-founded insurtech Bestow with Jonathan Abelmann in 2017 after struggling to safe his personal life insurance coverage coverage.
His objective was to make it simpler for individuals to acquire life insurance coverage and make the method extra tech-enabled.
Initially, Bestow operated as a direct-to-consumer insurance coverage supplier — promoting, underwriting, and servicing life insurance coverage insurance policies. In these first few years, the startup processed over one million purposes. Its no-exam underwriting platform gained traction in the course of the COVID pandemic as conventional medical exams have been paused. As it grew its D2C enterprise, Bestow in parallel developed software program to assist modernize the entire course of.
Recognizing the worth in that software program, Bestow in 2024 offered its insurance coverage provider and client enterprise to Sammons Financial Group for an undisclosed quantity. It switched its focus to offering its software program and companies to different life insurance coverage corporations so these corporations may “change into extra digital” and thus, extra effectively serve their clients.
And on Tuesday, the Dallas-based firm is saying that it has raised $120 million in Series D funding to launch new merchandise and underwriting capabilities, it has instructed TechCrunch completely. The fundraise, which O’Banion described as “oversubscribed,” was a mixture of $75 million in main and $45 million in secondary investments.
Goldman Sachs Alternatives’ Growth Equity and ex-Salesforce co-CEO Keith Block’s Smith Point Capital co-led the funding. In addition to the fairness financing, Bestow additionally secured a $50 million credit score facility from TriplePoint Capital. O’Banion declined to disclose Bestow’s valuation, noting solely that it had “roughly doubled” for the reason that firm raised $70 million in a Series C spherical in December 2020. With this newest financing, Bestow has raised greater than $300 million in fairness funding thus far.
O’Banion additionally declined to disclose arduous income figures, saying that Bestow’s annual recurring income grew 3x in 2024, and “10x” over the past two years. Its income mannequin is enterprise Software as a Service (software-as-a-service) and performance-based. The bulk of its income comes from utilization charges.
Ashwin Gupta, a Goldman Sachs Alternatives’ Growth Equity crew accomplice, instructed TechCrunch that he was interested in backing Bestow for a number of causes. For one, its founders have been repeat founders who had “efficiently pivoted the enterprise.” (Melbourne additionally co-founded BeautyBio and is a founding member of Presidio Title. Abelmann co-founded publicly traded Invitation Homes.)
Gupta additionally thinks its Software as a Service mannequin provides it an edge over extra legacy rivals.
“Bestow has a gorgeous finish market that’s massive, resilient and comparatively underserved by fashionable know-how…,” he mentioned. Gupta, who’s becoming a member of Bestow’s board as a part of the financing, additionally famous that he was impressed by Bestow’s means to have received a number of massive clients who have been increasing their use of its platform.
Its clients embrace Nationwide, Transamerica, USAA, Sammons Financial Group, and Equitable, amongst others.
Other backers embrace Breyer Capital, Valar Ventures, New Enterprise Associates, Core Innovation Ventures, Morpheus Ventures, and Sammons Financial.
Bestow, which has 167 staff, at the moment operates within the U.S. and is contemplating a global enlargement.
