by Ben Malka, Partner
We’re excited to share the news that Cota Capital is leading Glow’s new $22.5 million Series A funding round. Glow is reinventing the way that insurance is sold for the benefit of small businesses everywhere.
Glow’s digital platform automates the entire insurance process for small businesses. Glow uses data to ensure that a business is maintaining the correct coverage for all their insurance needs at the lowest cost, not just when they purchase, but every year.
One reason I love Glow is its immediacy. Take, for instance, the way that small-business owners purchase workers’ comp insurance. Because workers’ comp insurance is mandated by law, it is often the first insurance product that a new business buys. In fact, it’s required as soon as you hire your first employee. This puts Glow front and center for business owners at the beginning of their entrepreneurial journey. A relationship is established early on and, as it grows, Glow becomes a trusted provider—and it can effectively cross-sell other key products like business-interruption insurance and property and casualty insurance.
POLICIES THAT FIT BUSINESS BETTER
Distribution of commercial insurance is due for an update. Glow isn’t changing the nature of small business insurance. Rather, its aim is to change the way that companies purchase it. Specifically, Glow has mastered marketing techniques like micro-segmentation and proactive targeting to identify companies that might need better policy coverage. Using proprietary data, Glow often can deliver a better fit policy to those companies, at the exact time they need it.
What exactly is a “better fit” policy? Well, right now, most agents take a blunt-instrument approach to business insurance. Take a local restaurant, for example. Most agents will look at the number of employees and the zip code of that restaurant, then offer a price based on those scant details. But this price may not be the best fit for the restaurant. For instance, not all restaurant employees do the same kind of work. Some are waitstaff, some are delivery drivers and some work in the back office in accounting. In insurance, “one size fits all” is not an ideal approach.
What Glow does is take a closer look at the employee base and the job codes to offer a policy that more accurately reflects the needs of that business. With Glow, the result is a better, more cost-effective option than local agents typically provide.
Indeed, one big problem is that many small businesses buy their insurance from the neighborhood agent who treats them to lunch once a year and sponsors the local little league team. It’s friendly and folksy but it usually does not result in a small business getting the best possible policy, and SMBs are left wondering why costs continue to increase. These traditional agents often “sell-and-forget,” locking customers into renewals and walking away without reexamining whether their business, number of employees, or employee roles have changed. The Glow platform ensures that a company’s coverage is always up to date, at the lowest possible cost now and a year from now.
LOWER COSTS, GREATER CONVENIENCE
Glow offers other advantages as well. Businesses get a quote as soon as they sign up and can instantly eliminate paperwork by managing their policy and billing online. Glow also syncs directly with a company’s payroll, so businesses know exactly how much they owe every month.
In addition to cost advantages, Glow offers small businesses the convenience of a dedicated account manager who is a licensed insurance advisor that understands the company’s business, with concierge-like service available by phone or online.
A RARE OPPORTUNITY
Glow is truly a rare opportunity. It is taking an enormous industry that has seen little innovation on the distribution side and creating a new and improved sales channel that can greatly benefit small businesses. Small business insurance is a $100 billion market, and Glow’s approach has all the elements the industry needs to bring small businesses into the new era of digital insurance.
The company is representative of a broader trend in the financial services market. That is, financial technology is moving from simpler products to more complex products—from products geared toward the individual consumer, such as online car insurance, to products aimed at the complex needs of businesses. This is what Glow offers.
Glow also has the right team to execute on its vision. Founder and CEO Samad Wahedi has deep experience in the insurance sector. He helped build InsWeb, one of the very first online car insurance marketplaces for consumers. He is now applying his years of insights and learning to improve the distribution of business-oriented insurance products.
We are thrilled to invest in Glow and look forward to a bright future with the company.