Richmond-based startup Buddy, which sells software to insurance companies and on-demand accident insurance to outdoor enthusiasts, recently closed on a capital raise. (BizSense file)
A local startup insurance company has kicked off 2024 with a seven-figure capital raise.
Richmond-based Buddy, which sells software to insurance carriers and also offers its own in-house accident insurance coverage for outdoor activities, has secured $7.2 million in new fundraising, per SEC filings.
The company’s plans for the new funding were unclear. CEO and co-founder Charles Merritt declined to comment about the raise.
There were 49 investors in the round, which closed in mid-January, per SEC filings. The first sale of the round happened in March 2023, per the filings.
While he wouldn’t comment on the latest raise, Merritt said Buddy has hauled in just under $8 million from investors to date. Buddy has previously identified Sequoia Capital, Plug and Play and Atypical Ventures as investors in the company.
The new funding infusion comes about two years after Buddy pivoted to focus on selling software to insurance companies, though Buddy continues to offer the on-demand accident insurance product that it originally introduced in 2018.
Merritt said the pivot came as a way to take advantage of the work Buddy put into its platform, and the realization that the software could be used to offer other types of insurance.
Charles Merritt
“We are very good at building software to transact insurance on the internet. There are other people there who would like their insurance products to be easier to transact on the internet,” he said.
Buddy sells access to its software to brokerages and insurance carriers through a monthly subscription that charges per insurance product offered.
Subscribers are able to utilize Buddy’s platform to manage and offer products to their customers, who use the interface designed by Buddy to select and buy coverage online.
Buddy also charges a per-transaction fee.
The company currently has seven firms subscribed to its platform, Merritt said.
Merritt declined to share pricing information, saying that pricing can be flexible and the contract structures are still being experimented with.
Though Buddy has shifted its energies toward a business-to-business product after years focused on business-to-consumer service, Merritt said the company’s sales approach hasn’t needed to be changed much.
“For me, that transition is a reminder that the people who buy things on behalf of companies are also people. Communicating how we’re addressing a need for what you might think of as a customer isn’t really that different from how you would talk to someone who is spearheading ecommerce at a big insurance company,” he said. “We have a very human approach that started with our consumer roots.”
The software-as-a-service model officially launched in early 2022 after being announced in October 2021. Merritt said that the insurance industry has been slow to adopt the latest in customer-facing digital technology, and that Buddy is in a position to capitalize on a movement toward more modern online service.
“I don’t know if (the insurance industry) is dead last in terms of percentage of penetration, but they are definitely evolving now in a way that other industries have evolved 10 or 20 years ago when it comes to ecommerce,” he said.
Buddy continues to offer its accident insurance, which is aimed at outdoor enthusiasts who want coverage for intensive activities like rock climbing or mountain biking.
After kicking things off with coverage available to Arizona residents about six years ago, Buddy has over time grown to offer accident insurance to the residents of more than 45 states. But the company’s home state of Virginia remains elusive. Residents of the commonwealth still aren’t able to get coverage through Buddy due to regulatory issues, Merritt said.
“That is the current state of play here in the commonwealth. The product is still not approved,” he said.
The company’s accident coverage can last for as little as a day, with coverage starting at less than $10, to up to one year. Buddy provides up to $25,000 in cash to cover out-of-pocket expenses if a covered accident, like a traumatic brain injury or broken bone, occurs during an intensive outdoor activity, per the company’s website. Buddy’s coverage doesn’t have a deductible.
Buddy was founded by Merritt, insurance veteran Jay Paul and Martin Agency alum David Vogeleer. The company moved into a new office at 16 S. 17 St. in December and currently has 11 full-time employees.
Richmond-based startup Buddy, which sells software to insurance companies and on-demand accident insurance to outdoor enthusiasts, recently closed on a capital raise. (BizSense file)
A local startup insurance company has kicked off 2024 with a seven-figure capital raise.
Richmond-based Buddy, which sells software to insurance carriers and also offers its own in-house accident insurance coverage for outdoor activities, has secured $7.2 million in new fundraising, per SEC filings.
The company’s plans for the new funding were unclear. CEO and co-founder Charles Merritt declined to comment about the raise.
There were 49 investors in the round, which closed in mid-January, per SEC filings. The first sale of the round happened in March 2023, per the filings.
While he wouldn’t comment on the latest raise, Merritt said Buddy has hauled in just under $8 million from investors to date. Buddy has previously identified Sequoia Capital, Plug and Play and Atypical Ventures as investors in the company.
The new funding infusion comes about two years after Buddy pivoted to focus on selling software to insurance companies, though Buddy continues to offer the on-demand accident insurance product that it originally introduced in 2018.
Merritt said the pivot came as a way to take advantage of the work Buddy put into its platform, and the realization that the software could be used to offer other types of insurance.
Charles Merritt
“We are very good at building software to transact insurance on the internet. There are other people there who would like their insurance products to be easier to transact on the internet,” he said.
Buddy sells access to its software to brokerages and insurance carriers through a monthly subscription that charges per insurance product offered.
Subscribers are able to utilize Buddy’s platform to manage and offer products to their customers, who use the interface designed by Buddy to select and buy coverage online.
Buddy also charges a per-transaction fee.
The company currently has seven firms subscribed to its platform, Merritt said.
Merritt declined to share pricing information, saying that pricing can be flexible and the contract structures are still being experimented with.
Though Buddy has shifted its energies toward a business-to-business product after years focused on business-to-consumer service, Merritt said the company’s sales approach hasn’t needed to be changed much.
“For me, that transition is a reminder that the people who buy things on behalf of companies are also people. Communicating how we’re addressing a need for what you might think of as a customer isn’t really that different from how you would talk to someone who is spearheading ecommerce at a big insurance company,” he said. “We have a very human approach that started with our consumer roots.”
The software-as-a-service model officially launched in early 2022 after being announced in October 2021. Merritt said that the insurance industry has been slow to adopt the latest in customer-facing digital technology, and that Buddy is in a position to capitalize on a movement toward more modern online service.
“I don’t know if (the insurance industry) is dead last in terms of percentage of penetration, but they are definitely evolving now in a way that other industries have evolved 10 or 20 years ago when it comes to ecommerce,” he said.
Buddy continues to offer its accident insurance, which is aimed at outdoor enthusiasts who want coverage for intensive activities like rock climbing or mountain biking.
After kicking things off with coverage available to Arizona residents about six years ago, Buddy has over time grown to offer accident insurance to the residents of more than 45 states. But the company’s home state of Virginia remains elusive. Residents of the commonwealth still aren’t able to get coverage through Buddy due to regulatory issues, Merritt said.
“That is the current state of play here in the commonwealth. The product is still not approved,” he said.
The company’s accident coverage can last for as little as a day, with coverage starting at less than $10, to up to one year. Buddy provides up to $25,000 in cash to cover out-of-pocket expenses if a covered accident, like a traumatic brain injury or broken bone, occurs during an intensive outdoor activity, per the company’s website. Buddy’s coverage doesn’t have a deductible.
Buddy was founded by Merritt, insurance veteran Jay Paul and Martin Agency alum David Vogeleer. The company moved into a new office at 16 S. 17 St. in December and currently has 11 full-time employees.