Toronto-based Walnut Insurance, which provides a technology infrastructure that helps brands deliver their own insurance offerings, has raised $4 million CAD in seed funding.
The all-equity round, which closed in November, was led by ATB Financial and NAventures, the National Bank of Canada’s corporate venture capital arm. Others that participated include Harvest Venture Partners, Highline Beta, and N49P.
“We are empowering partners to be able to offer innovative insurance products to millions of customers without the need for years of heavy investment.”
Founded in 2020 by serial entrepreneur Derek Szeto and growth specialist Adrien Niblock, Walnut has built a platform for brokers, employers, and other financial services providers. It provides access to a broad set of insurance products that can be embedded into or alongside consumer experiences.
Walnut aims to make insurance accessible to both companies and consumers. For personal lines of credit (such as home, rent, auto), Walnut provides consumers with access to quotes from various insurers online, paired with affinity pricing (groups of products that are related and often purchased together).
As for its partners, Walnut claims that it allows brands to establish a multi-carrier insurance arm in weeks versus years, and at a small fraction of the cost compared to traditional distribution of insurance products.
According to the startup, its API-driven distribution approach has allowed it to establish partnerships with the likes of Neo Financial, Nuula, Sontiq.
Walnut’s partnership with Neo supports the latter’s subscription-based credit card. Across Neo’s various credit cards, Walnut’s platform powers its life insurance and mobile protection offerings.
As Neo expands its product offerings into mortgages, Walnut said it will work with Neo to provide customers with access to competitively-priced insurance products on that front as well.
“We are empowering partners to be able to offer innovative insurance products to millions of customers without the need for years of heavy investment,” said Szeto. He claims that embedded insurance is predicted to become a $3 trillion market, and that “Walnut is well positioned to be a leader” in the industry.
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Szeto brings a wealth of experience in financial products to Walnut, with past leadership positions in startups and financial institutions.
Before he created Walnut, Szeto also founded RedFlagDeals, Canada’s bargain shopping staple. He was also the co-founder of SaaS-based hiring platform Wirkn, as well as Butter, a platform to track paid memberships and subscriptions. For three years, Szeto worked as senior director at the Royal Bank of Canada where he co-led a collaboration between RBC Ventures and the RBC core personal lending team to launch RBC PayPlan, which allows installment lending at point of sale.
At his latest venture with Walnut, Szeto said there is a “continuing revolution inside the insurance industry.” Walnut started with life and embedded memberships, and has since added offerings for home, auto, and renters.
This funding round, according to Walnut, will support the company as it continues to build out its product infrastructure and further expand strategic partnerships across North America.
Walnut told BetaKit that the company will be hiring for its senior executive team that will start with Walnut in the new year.
Walnut has raised $6 million CAD in total funding to date. This includes a $1 million pre-seed round in 2020.
With files from Michael Edgar.
Featured image courtesy Nappy.
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