Just raises $8M in its effort to beat Root at the car insurance game

Just Insure, a pay-per-mile insurance technology company, has raised $8 million in a funding round. 

CrossCut Ventures, ManchesterStory and Western Technology Investments co-led the investment, which brings its total raised to $15.3 million since its January 2019 inception.

Los Angeles-based Just says it uses telematics “to reward safe drivers and reduce insurer bias” by looking at factors such as how, when and where customers drive, rather than factors such as ZIP code or marital status as most traditional insurers do. Or put more simply, it charges customers only for miles driven and its rates vary based on driving behavior. This way, Just says it’s able to offer lower rates for “safer drivers,” and it claims to save its customers around 40% from their “previous auto insurance company.” For now, it’s only available in Arizona, although the company plans to expand to other markets such as Texas, Nevada, Pennsylvania, Ohio and Georgia.

Image Credits: Just Insure

Of course, Just is not the first company to offer personalized auto insurance. There’s Metromile, which launched its personalized pay-per-mile auto insurance in 2012. And there’s also Root Insurance, an Ohio-based car insurance startup that uses smartphone technology to understand individual driver behavior. Although there are similarities between Root and Just, there are also distinct differences, according to founder and CEO Robert Smithson.

Root charges customers a monthly fee, and when policies are renewed, the rate is subject to change based on driving behavior. Just has a similar model. If its drivers exhibits safe driving behavior, their rates can fall. On the other hand, if they exhibit dangerous behavior, their rates can rise. But unlike Root, Smithson said, Just only charges its “liability only” customers for miles driven. There is no monthly fee. For “full cover” customers, Just also includes a “small daily charge” to reflect the risk that someone could steal their car. For its part, MetroMile charges customers a base rate plus a per mile rate. Neither rate are affected by how a person drives, notes Smithson.

“The [Just] per mile price that a customer gets can change every month. This means we’re able to rapidly reward safe drivers with lower rates, and to increase them for those who drive less well,” Smithson said. “This rapid feedback loop encourages people to make smarter driving decisions. And it means that our customers have fewer accidents, and we do better. ”

In 2020, Root had a direct loss ratio of 82%. Just’s direct loss ratio is 65.8% year to date so far. But of course, it has far fewer customers and is only serving one market. Still, the company says that it has already achieved underwriting profitability in terms of what portion of premium to it pays out in claims.

Also, with so many people shifting to working from home over the last year, Just says it has seen increased demand this year. It issued over 1,000 new policies in the second quarter, up “tenfold” compared to the same period in 2020. The startup said during that same time, its revenue climbed 1,400% compared to the second quarter of 2020

“People are simply driving less as a result of increased work-from-home rates, and this isn’t changing anytime soon,” Smithson said. “Our approach enables us to offer customers rates that are truly reflective of their driving.”

The company likens its user experience to that of a prepaid phone card. Just customers can “load up” their account for $30 for minimum liability-only coverage and $75 for full coverage to start driving. The company’s insurance policy is for 30 days. So as customers drive, their balance declines. Every 30 days, the company changes each customer’s price as it gathers more data about their driving habits.

It’s an approach that Matt Kinley, co-founder and managing partner at ManchesterStory, had never before seen.

“It is more fair, affordable and customized across the board, and unique because the company offers customers rates that are actually reflective of their driving, which rewards safe drivers with lower insurance premiums,” he said.

The company plans to use its new capital in part to do some hiring — it currently has a staff of 35 — and scale its product offering. It is also planning to launch beyond Arizona into neighboring states. In particular, Smithson said the startup is “keen” to launch in Texas.

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Job offer management platform Compa emerges from stealth with $3.9M

If you haven’t noticed yet, the hiring market is a hot one — and getting more complicated as enterprise talent acquisition leaders face technology gaps while assessing candidates. This leads to difficulty in determining compensation.

Enter Compa. The offer management platform provides “deal desk” software for recruiters to more easily manage their compensation strategies to create and communicate offers that are easy to understand and are unbiased.

Charlie Franklin, co-founder and CEO of Compa, told TechCrunch it was frustrating to lose a candidate at the compensation stage, so the company created its software to reduce the challenge of relying on crowdsourcing data or surveys to compare pay.

“Recruiters often lack the data and tools to figure out how much to pay people and communicate that effectively,” Franklin told TechCrunch. “We see talent acquisitions teams like a sales team. If you think of it from that perspective, they need to close a candidate, but to ask the recruiter to operate off of a spreadsheet slows that process down.”

Compa co-founders, from left, Charlie Franklin, Joe Malandruccolo and Taylor Cone. Image Credits: Compa

With Compa, recruiters can input pay expectations and compare recent offers and collaborate with other team members and hiring managers to reach pay consensus quicker. The software automates all of the market intelligence in real time and provides insights about compensation across similar industries and organizations.

The company, based in both California and Massachusetts, emerged from stealth Thursday with $3.9 million in seed funding led by Base10 Partners. Participation in the round also came from Crosscut Ventures and Acadian Ventures, as well as a group of strategic angel investors including 2.12 Angels, Oyster HR CEO Tony Jamous and Scout RFP co-founders Stan Garber and Alex Yakubovich.

Jamison Hill, partner at Base10 Partners, said via email his firm was doing research in the ESG “megatrend,” particularly looking for startups focused on compensation management, when it came across Compa.

He was attracted to the founders’ “clarity and conviction” on the company’s vision, their understanding of the pay gap in the market, how Compa’s solution would “create a new wave of smarter, more-data driven recruiting teams” and how it was enabling employers to use compensation and a positive offer management approach to differentiate itself from competitors.

“They deeply understand the nuances that come with enterprise-level HR teams and bring that expertise to every aspect of Compa’s product offering, which is why we believe Compa can emerge as a leader in this trend and chose to partner with this very special team,” Hill added.

Franklin, who previously led human resources M&A at Workday, founded Compa last year with  Joe Malandruccolo, who was on the engineering side at Facebook and Oculus, and Taylor Cone, who has done innovation consulting for organizations like Stanford University.

The company was bootstrapped prior to going after the seed round and will use the capital to expand the team and create additional products that fit into its mission of “making compensation fair and competitive for everyone,” Franklin said.

Going forward, he adds that job offers and compensation need to catch up to how quickly the world is changing. As more people work remotely and companies want to attract a diverse workforce, compensation will be an important factor.

“This is a long-term trend we are seeing in HR — compensation becoming more transparent — not just a spreadsheet shared internally, but a transition from secretive to open and accountable, Franklin said. “Technology is catching up to that, and we have the ability to produce outcomes that drive differences in pay.”

 

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Branch raises $48M from Lee Fixel’s Addition, Indeed to provide accelerated payments to workers

Branch, which has built a flexible workforce payments platform, announced today it has raised $48 million in Series B funding and closed on a $500 million credit facility.

Lee Fixel’s Addition –– which has also backed the likes of Flipkart, Stripe and Coinbase – led the equity financing while the credit facility was secured in the form of purchased assets from funds managed by Neuberger Berman.

Drive Capital, Crosscut Ventures, Bonfire Ventures, Matchstick Ventures, and HR Tech Investments LLC, a subsidiary of Recruit Holdings Co., Ltd. (an affiliate of job search site Indeed) also participated in the equity funding, among other investors. With the latest investment, Minneapolis-based Branch has brought in a total of $58 million in equity funding since its 2015 inception.

The raise marks Branch’s first since 2017.

Branch CEO and founder Atif Siddiqi declined to reveal at which valuation the company’s current round was raised but did note that it saw 300% revenue growth year over year in 2020, and a 700% increase in the number of enterprises using its platform.

Branch was founded to give companies a more cost-effective, faster way to pay employees and  contractors, which in turn theoretically can maybe help them attract and retain talent and save money compared to using traditional payment methods. 

When Siddiqi first started the company, Branch was focused on a use case of helping workers pick up additional hours at companies they already worked at to grow their income. But then the team started looking for other ways to help these workers financially.

One of our strengths was that we were connected to a lot of very disparate enterprise systems. And we were collecting a lot of really interesting employment data,” Siddiqi told TechCrunch. “With that data, we realized we could really build a better financial service experience for this consumer.”

Branch typically focuses on low to moderate income users, and sits between the company and its worker payment flows.

It started off with earned wage access and then began accelerating payments for workers. It has since expanded into use cases such as digital tip payments.

“One of the things we saw when we were working with a lot of Domino’s franchisees is that a lot of them didn’t have enough cash at the end of the day to tip out their drivers,” Siddiqi explains. Rather than be forced to go to an ATM to get cash, some turned to Branch’s Wallet offering, which gives franchise owners the ability to push tip payments in real time after a driver finishes a shift.

“Tips represent about 40% of a driver’s income on a monthly basis so that’s pretty significant,” Siddiqi said.

Branch then expanded into contractor payments, such as helping companies pay their 1099 contractors faster with a “uniform” payment experience.

“We realized we could rebuild a better financial service experience from the ground up, and that’s where you find Branch today,” Siddiqi said.

Siddiqi said the company tries to provide as many free options as possible such as not charging for instant transfers into the Branch Wallet and non-instant transfers to another financial account.

Like many other fintechs, the startup monetizes primarily off of interchange fees. It also charges a transaction fee for pushing funds instantly from the Branch Wallet to another financial account.

“Faster payments is a compelling and transformative benefit expected by today’s workforce,” Siddiqi said. “We’ve seen how it can significantly improve cash flow for both companies and workers, so we’re excited to deliver instant payments and other engaging tools to more sectors and workforces, from other workers living paycheck to paycheck to independent contractors growing their own businesses.”  

As part of the company’s efforts to grow beyond the multi-billion dollar earned wage access market, it has expanded into contractor and influencer payments with a new deal with influencer marketing platform Tagger and other on-demand delivery platforms. 

Branch also recently inked an agreement with Kelly, a global staffing firm. Other customers include Delivery Drivers, Inc. (DDI), an independent contractor management solution specializing in last-mile delivery, and HR and IT management platform Rippling.

The company is similar to another fintech, GigWage, but the biggest difference – according to Siddiqi –– is that Branch has built its own payment rails and system to push out funds instantly, and also has offerings for W-2 workforces.

Drive Capital Partner Andy Jenks believes that the company’s financial services address pay cycle gaps and cash flow challenges in a way “that can save time and costs for both workers and the companies they work for.”

“We’ve seen how impactful Branch’s acceleration of payments for employers and the W-2 workforce has been,” he wrote via email, “and look forward to their expansion into contractor payments where they can serve a range of rapidly growing industries such as last-mile delivery, logistics and influencers.”

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SoftBank bets big on a ‘digital Ellis Island’

Welcome Tech, which has built a digital platform aimed at immigrants and their families, has raised $35 million in a Series B funding round co-led by TTV Capital, Owl Ventures and SoftBank Group Corp.’s SB Opportunity Fund.

Crosscut Ventures, Mubadala Capital, Next Play Capital and Owl Capital also participated in the financing, which brings the Los Angeles-based company’s total raised to $50 million since its 2010 inception. Welcome Tech, which has an office in San Antonio, Texas, raised an $8 million Series A in March of 2020.

Built by immigrants for immigrants, Welcome Tech aims to do just what its name indicates — help immigrants feel more welcome, have an easier transition and achieve greater success when moving to the United States.

The company’s approach was different in that rather than launch a banking product and then set out to earn the trust of the community it aims to serve, it first worked hard to earn that trust and understand the community’s needs. 

So in its first years of existence, Welcome Tech has focused on building out a platform that provides educational resources, information and services that “they need to thrive in a  new country.” Its efforts are initially primarily focused on the Hispanic community in the U.S.

The goal of its platform, dubbed SABEResPODER (meaning Knowledge is Power in Spanish), is to serve as “a widely recognized and trusted resource” to members of the Hispanic community in the U.S., the company says.

Armed with knowledge and data that it has gathered over the years, Welcome Tech six months ago launched a banking service, including a debit card and bilingual mobile app. And in January, it launched a monthly subscription offering that gives users access to discounted resources such as medical and dental professionals.

Gardiner Garrard, co-founder and partner, TTV Capital, points out that the Hispanic market represents the largest minority cohort in the U.S., with a population of 62.8 million. 

“That said, less than half of Hispanic households are ‘fully banked’, meaning they cannot open an account, which then negatively impacts their ability to secure other products or services,” Garrard said. “To not serve this community is a major failure. Welcome Tech is addressing this issue head on.”

Today, Welcome’s platform is approaching 3 million active users, according to co-founder and CEO Amir Hemmat. Its ultimate goal, he said, is to serve as “digital Ellis Island.” 

“The way we leave immigrants’ success to chance is pretty crazy,” he told TechCrunch. “If you think of countries the way you think of companies and the way they want to attract and retain…here, we almost do the opposite.”

Image Credits: Welcome Tech

In particular, Hemmat and co-founder Raul Lomeli-Azoubel recognized that access to financial services was crucial to immigrants’ success.

“Although we ultimately see ourselves building towards a better future for immigration and a broader platform, the foundation and beachhead for that is definitely in financial services,” Hemmat said.  

Welcome offers a free banking account that is fully bilingual for English and Spanish speaking communities with “key features that are very tailor made for this community.”

A number of new digital banks targeting Latino and immigrant communities in general have emerged in recent years, including TomoCredit and Greenwood. Welcome aims to differentiate itself from competitors in being a more broad-based platform. Its subscription offering — at $10 a month — does things like offer discounts to healthcare professionals and free televisits, for example.

“When we dug in, we realized that immigrants are not being provided data-driven recommendations,” Hemmat said. “It’s very much a word of mouth and trial of error, and in some cases highly predatory, experience. We’re working to aggregate a historically fragmented audience and that gives us massive leverage to source better offerings, pricing and experiences for consumers across multiple categories.”

The company plans to use its new capital to build more partnerships so that it can do the above, as well as spread awareness about its services.

Gosia Karas, vice president and head of growth-stage investments at SoftBank’s Opportunity Fund, told TechCrunch that the fact that the immigrant population in the U.S. is “growing really fast and underserved creates an opportunity for someone to come in and serve them well with a financial services offering.”

In particular, SoftBank was attracted to Welcome Tech’s approach to truly understand, and gather data around, its target market.

“Before even jumping head first into building a fintech company, they did a lot of work prior,” Karas said. “They spent years building an understanding of this audience of the immigrant population, including building trust within that demographic. And at the same time, they have been building targeted content. This serves as a really great backbone to build a company that is very well-suited to serve that audience and to roll out things like the debit card and other financial services offerings.”

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