Mark Shaw likes to run.
The serial entrepreneur joined activity and fitness tracking platform Strava as co-founder in 2009 to lead engineering as CTO. It’s been there for eight years, and with its latest addition in 2020, Strava has reached 70 million members worldwide and has amassed an almost cult-like following among its users, including professional runners who want to track their progress.
Before that, Shaw helped start insurance software outfit Guidewire. Again, before going public in 2012, he helped the company grow to the next level with its engineering, analytics and marketing chops.
After a short hiatus from these two, Shaw teamed up with Josh Weiss and Graham Gerlach in 2020 to launch his third company: Incline. The fintech startup is growing in its own right, even if it doesn’t have tens of millions of users or has yet to go public. And it raised $15 million in Series A funding to continue growing and building out the technology.
Tendency, Shaw admits, is a very different type of company than Strava. The startup lends to all life insurance policies, with the goal of digitizationThere are a lot of traditional time-consuming tasks involved in the process,” he said.
“There’s a trillion dollars in monetary value in a lifetime in America,” Weiss told TechCrunch. “We want to support this great opportunity.”
The current credit market is $150 billion, compared to $1.1 trillion, and that’s the primary focus of interest.
“With our improved rates and efficiencies, we believe we can increase that loan volume,” Shaw said.
Hudson Structured Ventures led the Inclined Series A financing, which included participation from Anthemis Group and other new and existing backers. The startup has raised a total of $19 million as of 2020.
The startup’s Series A was prompted by what Shaw described as “a very aggressive fundraising environment” over the past two decades.
“Ours is a counter-cyclical business, and it’s a very safe type of credit,” he told TechCrunch. “This is the time when people want to get these loans. It’s the right time to step up – we can make a big impact in these sad and difficult times.”
Whole life insurance policies differ from term life insurance policies in that they Instead of paying just for coverage, store the value that’s always available. Shaw likens it to buying a home.
And when whole life policyholders want to get their cash value, they prefer to borrow money instead of taking it outright, which is less efficient, he said.
The trend, he added, in addition to opening up the option of borrowing to more people with whole life insurance policies — something historically reserved for the wealthy — gives banks a way to better participate in the market. And because banks often have “much lower rates than insurance companies,” Shaw explained, that means borrowers borrow at lower interest rates. Also, their money can be compounded for decades.
“This means they can realize five-to-10x the value of life insurance over their lifetime,” Shaw told TechCrunch.
It goes live with Mechanics Bank, which has nearly $20 billion in assets. And now it has several million dollars on the stage.
Vikas Singhal, Founding Partner at HSCM Ventures; Inlind believes that a digital-enabled financial transaction involves four “distinct but important parties”: insurance companies, agents/brokers, lenders/banks and policyholders.
“The financial transaction provides immediate value to the primary customer — a pre-borrowed policyholder who lowers their borrowing costs — but provides highly aligned and equally valuable value to all other parties,” Singhal wrote in an email. “This is financial democracy at its best. While refinancing existing policy loans has been around for some time, it hasn’t always been accessible to everyone, and a digitally enabled turnkey solution opens up the ability for everyone to use.
His company also sees Enlind’s offering as a starting point.
“Cash value in fixed life insurance products is an untapped asset and we believe the entire market of that can benefit from banking products built as a base,” added Singhal.
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