Pet insurance startup Wagmo raises $ 12.5 million
Wagmo, a pet insurance startup, raised $ 12.5 million in a Series A funding round. Founded by Christie Horvath, who was inspired to start the business after receiving a $ 10,000 vet bill for his dog, and Ali Foxworth in 2017, Wagmo is looking to become a big player in the growing pet industry.
Investors in the Series A funding round included Female Founders Fund, Clocktower Technology Ventures and Vestigo Ventures. Several angel investors also participated in Series A. Among them were Jeffrey Katzenberg, the former CEO of DreamWorks Animation, and Jim Grube, the former CFO of soft and member of the Board of Directors of GameStop.
Established players in the pet insurance industry
The pet insurance industry already has several other established players. However, Wagmo believes in offering its customers a unique value proposition. Most pet insurers focus on coverage for emergencies and serious conditions such as fractures and surgeries. Wagmo offers a health insurance plan with equally comprehensive coverage for more serious conditions, but it also offers a basic wellness plan.
Wagmo’s premise is that, especially in a puppy’s early years, most health costs stem from routine, basic care such as annual checkups, vaccines, blood tests, fecal tests, and grooming. . The wellness plan focuses on optional preventative care, rather than coverage for accidents or serious injuries. Most other pet insurance companies do not offer wellness care as a stand-alone product.
Several startups and more established insurance industry veterans have gained a foothold in the pet insurance arena. Recognized names in the insurance industry such as Geico, Progressive and Nationwide offer comprehensive pet insurance plans. Lemonade, the insurance startup known for its hot pink logo and use of artificial intelligence to quickly process claims, offers plans starting at $ 10 per month. Other popular pet insurance startups include Pumpkin, Figo, and Healthy Paws.
Wagmo’s wellness plan
Unlike other brands of pet insurance, Wagmo customers can enroll in the wellness program and opt out of the insurance plan. This is a distinct advantage for the Wagmo platform. It allows users to join Wagmo only for basic needs in the first place. Later, if they wish, users can switch to a plan that also covers health insurance in the event of accident and illness. This approach is more cost effective for customers who do not want a plan that includes emergency and accident coverage.
Wagmo wellness membership plans are available in three levels: value plan, classic plan and luxury plan. The value plan costs $ 20 per month while the luxury plan costs $ 59 per month. Wagmo’s pet health insurance plan starts at $ 13 per month. Customers can mix and match the features of wellness and health insurance plans and create a plan optimized for their pet’s needs.
A diverse group of employees
Co-founder Christie Horvath is CEO and co-founder Ali Foxworth is COO. Wagmo is a diversified company: 58% of employees are women. Wagmo also claims a strong representation of under-represented minority backgrounds.
CEO Horvath explained her strategies on the future direction of the company. “It is a privilege to shape and develop a corporate culture from the ground up, and there is nothing more rewarding than building a passionate and diverse team that absolutely crushes it,” said Horvath.
The founders have leading professional references
Horvath and Foxworth both come from finance and business backgrounds. Horvath is a graduate of Harvard Business School and Foxworth is a graduate of the Wharton School of Business at the University of Pennsylvania. Before attending business school, Horvath and Foxworth worked at BlackRock.
“The biggest challenge is figuring out how to seize the opportunity that lies ahead, especially in the area of employer benefits. What keeps us from sleeping at night is knowing where to start, what priorities, how to allocate limited resources and time, ”says Horvath.
Wagmo is looking for ways to partner with larger organizations and businesses. The hope is that companies end up offering Wagmo pet insurance as part of their benefits.
Wagmo generates income through its wellness and insurance plans. A relatively small startup with around 20 employees, Wagmo aims to rapidly expand its presence. In 2019, the company raised a $ 3 million oversubscribed funding round co-led by Harlem Capital and Vestigo Ventures.
The long-term plan: provide nationwide pet insurance
Wagmo hopes to eventually offer its insurance nationwide. To date, the company has processed approximately 30,000 welfare reimbursement claims. It reported 20% month-over-month user growth since the start of the pandemic.
There is a great market opportunity to expand nationwide. Clara Sieg, a Revolution Ventures partner who will join Wagmo’s board of directors, notes that existing pet insurance products have failed to meet the needs of many pet owners. “Currently, only 3% of pets are insured due to poor customer experience and outdated offerings from older carriers. Yet, pets have become an increasingly important part of owners’ lives, especially for the younger generations. “