Mark Shaw loves to run.
The serial entrepreneur joined activity and fitness tracking platform Strava as a co-founder in 2009 to Lead Engineering as CTO. It’s spent eight years there, and as of the most recent increase in 2020, Strava has reached 70 million members globally and amassed a cult-like following from its users, including professional runners seeking to track their progress.
Prior to that, Shaw helped set up the Guidewire insurance program. Once again, he helped the company grow to a different level with his engineering, analytics and marketing techniques before it went public in 2012.
After a short break from these two assignments, Shaw teamed up with Josh Wyss and Graham Gerlach in 2020 to start his third company: Inclined. A fintech startup is growing in its own right, even if it hasn’t attracted tens of millions of users or hasn’t gone public yet. And it just raised $15 million in Series A funding to continue growing and building its technology.
Shaw admits that a “slanted” company is a very different kind of company than Strava. The start-up lends against whole life insurance policies, aiming to digitizeHe said that many traditional, time-consuming processes “involve this process.
“There is a trillion dollars of monetary value in the entire life in the United States alone,” Wyss told TechCrunch. “We want to take advantage of this huge opportunity.”
The current lending market today for $1.1 trillion is $150 billion, and that is Inclined’s initial focus.
“We believe we can increase the lending rate with better rates and efficiency,” Xu said.
Hudson Structured Ventures led Inclined’s Series A funding, which included participation from Anthemis Group and other new and existing backers. The startup has raised a total of $19 million since its inception in 2020.
The startup’s Series A originated in what Shaw described as “the most brutal fundraising environment” he’s been in in the past two decades.
“Our business is a very counter-cyclical, very secure form of lending,” he told TechCrunch. This is the time when people need to get these loans. It’s the time for us to grow – we can make a huge impact during these tough and even tougher times.”
Life insurance policies differ from lifetime insurance in that they are Permanently accumulate available value, rather than simply paying for coverage. Shaw likens it to buying versus renting a house.
He explains that when life insurance policyholders want access to their cash value, they often choose to do so with a loan, rather than withdrawing money directly, which is less efficient.
He adds that it tends not only to open up the option to borrow against whole life insurance to more people – something that has historically been reserved for the wealthy – but also gives banks a way to better participate in the market at scale. Xu explained that because banks often have “much lower rates than insurance companies,” this means borrowers will borrow at lower interest rates. In addition, their money can be doubled over decades.
“This means that they can generate five times more value from life insurance during their lifetime,” Shaw told TechCrunch.
Inlanders live with Mechanics Bank, which has about $20 billion in assets under management. It currently has several million dollars on its platform.
Vikas Senegal, Co-Founder, HSCM Ventures, Inclined believes that four “distinctive but important components” are involved in a single digitally enabled financial transaction: insurers, agents/brokers, lenders/banks and policyholders.
“The financial transaction delivers immediate value to the end customer – as the policyholder who has already borrowed reduces the cost of borrowing – but it also provides very consistent and equally important value to all other components,” Singhal wrote by email. This is financial democracy at its best. While current policy loan refinancing has been going on for some time, it has not always been available to everyone, and a digitally enabled turnkey solution opens the door for everyone to be able to benefit.”
His company also views the Inclined offer as just a starting point.
“The cash value within perpetual life insurance products is an underutilized asset, and we believe this entire market can benefit from banking products being built as a foundation,” Sengal added.
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