This morning, Austin-based insurance company Zebra announced the completion of a $ 38.5 million Series C. Accel led the financing event, attended by previous investors, Silverton Partners, Ballast Point Ventures and the company's CEO, Keith Melnick. Floodgate and Weatherford Capital also invested in the round.
According to Melnick, the company had targeted a final total of nearly $ 30 million, but the interest in the company's existing investor base to put more capital into the business led to a larger series C. The zebra previously increased a number of seed Rounds and a Series C with $ 17 million led by Ballast and Series B with $ 40 million led by Accel.
The Zebra is participating in startups including Insurify ($ 23 million), Gabi ($ 27 million) and Policygenius to raise new capital this year. Why do venture capitalists invest so much money in space? When we asked the question recently, we saw sales growth among the players and an overall addressable market that was likely attractive as a reason.
Fortunately, The Zebra released some tough performance numbers related to its round, showing not only why the company was able to raise more capital, but also why the place is hot.
When most startups raise capital, they rarely share performance results and business metrics. This leads to press releases that are so bland and inconspicuous that many rounds are reported by exactly zero media members.
One way to avoid this mild fate is to share at least directional results. For example, ARR growth year on year. The next level of transparency – and therefore taste – delivers real numbers. Which is what the zebra did as part of its C series. Here you are:
- The zebra currently records "1.3 million monthly website visitors".
- The company's sales "increased nearly 200% year over year to nearly $ 37 million in 2019".
- The annual execution rate (not the annual recurring revenue) is now over $ 60 million.
- The company expects growth of "well over 100%" in 2020.
It's an impressive list of metrics. An interview with the company's CEO helped clarify some more details.
According to Melnick, The Zebra improves customer acquisition costs over time as it also improves revenue generation (both categories on a unit basis), which means the company doesn't spend its capital on driving artificial growth.
Given the company's expected growth, when is the IPO? Melnick cited his time with Kayak (who went public) and listened to investor Mike Moritz, who was skeptical during the IPO. Melnick joked: [with] For the most part, Mike was right. "The zebra is not focused on any particular exit, he said. Instead, it wants to perform well, which will offer the company a number of options in due course.
In summary, the zebra's $ 38.5 million will bring us to $ 185.5 million by 2020 that we've raised across four insurance markets. It will be fascinating to see where all startups are at the end of 2020 and whether they have merged by then.