Startup raises $27M to make tiny checkout insurance cheaper to sell

Slingshot Insurance, a Minneapolis startup, is coming out of stealth with $27 million in seed funding. It wants to make the small insurance policies sold at checkout cheaper to run. Rally Ventures and Skyward Group co-led the round, the company told Crunchbase News exclusively. If you run a software or booking business, add-on coverage could become a new way to earn money from sales you already make.

What Slingshot does

The focus is embedded insurance. That means a small policy offered as part of another purchase, such as coverage when you book a flight. Slingshot's software connects a business with the insurer that backs the coverage. The company says it uses AI to process and share data between the two sides, which cuts the administrative work that makes cheap policies costly to offer.

Why small policies are hard

Every policy brings paperwork, coordination with an insurer and possible claims, whether it costs $25 or $2,500. CEO Ethan Genteman gave a hypothetical: a program collecting $500,000 in premiums at a 10% margin keeps only $50,000. He said that is not viable for the way traditional insurers are set up.

Slingshot says it wants to replace spreadsheets, emails and disconnected systems with software that links sellers and insurers directly. It also says the system keeps a record of decisions that the businesses involved can review.

Who is behind it

Slingshot began operating July 1 and has six people. Rally is a co-founder. Its first customer and design partner is Vertical Insure, which serves more than 750,000 customers at an average premium of $25. Vertical Insure CEO Brock Noland, also a Slingshot co-founder, said slow approvals on the insurer side hold things up. Slingshot's first program is set to launch this month.

How it makes money

Slingshot charges a 5% technology fee to run programs on its platform. For now it works with outside insurers. Genteman said the company is not an insurer yet but is "rapidly closing on our carrier." Buying one would let it offer both the software and the financial backing for policies.

What it could look like

Genteman offered examples of products that could be built. They are ideas, not launched offerings.

• A $25 cancellation or injury policy offered with a $2,000 youth volleyball league signup
• Coverage for replacement childcare if a babysitter cancels last minute
• Coverage for unexpected vet bills if a pet is hurt during a boarding stay
• Damage or theft protection added at checkout on an equipment rental

The material does not name the insurer Slingshot hopes to buy, give a price or timeline, or say which products will come first.