Mark Shaw loves to run.
Serial Entrepreneur Joins Activity and Fitness Tracking Platform Strava as co-founder in 2009 led development as CTO. He spent eight years there, and at the time of the last boost in 2020, Strava reached 70 million users worldwide and amassed a near-cult number of its users, including professional runners eager to track their progress.
Before, Show helped launch the Guidewire insurance software. Again, he helped take the company to the next level with his engineering, analytics and marketing expertise before it went public in 2012.
After taking a short break from those two jobs, Shaw teamed up with Josh Wyss and Graham Gerlach in 2020 to start his third company: Inclined. A fintech startup is growing on its own, even if it hasn’t yet attracted tens of millions of users and gone public. The company has just raised $15 million Series A to continue growing and developing its technology.
Inclined, Shaw admits, is a very different type of company than Strava. A startup lends against life insurance policies in order to digitize “according to him, many of the traditional labor-intensive operations” involved in this process.
“In the US alone, a lifetime is worth a trillion dollars in cash,” Wyss told TechCrunch. “We want to take advantage of this huge opportunity.”
The current lending market today against that $1.1 trillion is $150 billion, which is Inclined’s original target.
“We believe we can increase this lending rate with our improved rates and efficiency,” Shaw said.
Hudson Structured Ventures led Series A Inclined funding, which included Anthemis Group and other new and existing backers. The startup has raised a total of $19 million since its founding in 2020.
The startup’s Series A has been raised in what Shaw called “the most brutal fundraising environment” he’s faced in the last two decades.
“We have a countercyclical business and a very safe form of lending,” he told TechCrunch. “This is the time when people need access to these loans. This is the right time for us to grow – we can make a big impact in these challenging and challenging times.”
Term life insurance policies differ from term insurance policies in that they accumulate value that is available all the time, rather than just paying for coverage. The show likens it to buying a house rather than renting it.
And when lifelong policyholders want to access their cash value, they often choose to do so with a loan rather than withdraw money directly, which is less efficient, he explains.
Propensity, he adds, not only opens up the possibility of taking out life insurance loans to more people — something that has historically been reserved for the wealthy — it also enables banks to better participate in the market at scale. And because banks often have “much lower rates than insurance companies,” Shaw explained, that means borrowers can borrow at lower interest rates. Plus, their money can accumulate over decades.
“That means they can get five to ten times more from their life insurance over the course of their lifetime,” Shaw told TechCrunch.
Inclined is working with Mechanics Bank, which manages about $20 billion in assets. And currently there are several million dollars on its platform.
Vikas Singhal, Founding Partner of HSCM Ventures, believes that Inclined involves four “separate but important elements” in a single digital financial transaction: insurance companies, agents/brokers, lenders/banks, and policyholders.
“The financial transaction provides immediate value to the end customer — the insurer who has already taken out a loan reduces the cost of borrowing — but also provides very consistent and equally important value to all other participants,” Singhal wrote in an email. “This is financial democracy at its best. While refinancing existing insurance loans has been going on for quite a while, it hasn’t always been available to everyone, and a digital turnkey solution opens up an opportunity for everyone.”
His firm is also looking at Inclined’s proposal as a starting point.
“The cash value within permanent life insurance products is an underutilized asset and we believe this entire market can benefit from the banking products that are built on top of it,” Singhal added.
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