Some of Hollywood’s biggest names are teaming up to back a surprising insurance startup. San Francisco-based Ethos Technologies Inc., which was founded last year, recently launched a unique new product featuring a streamlined process for buying term life insurance. The startup hopes to make buying life insurance faster and cheaper, and now some big names are on board to back the venture.
The company quickly raised $11.5 million in a round led by Silicon Valley’s Sequoia Capital. But some of the other investors named in the round look like a who’s who of a Hollywood awards show. According to Bloomberg, Jay-Z’s entertainment company Roc Nation, Robert Downey Jr.’s Downey Ventures, basketball star Kevin Durant’s Durant Co., and Will Smith’s Smith Family are all investors of the Silicon Valley startup.
The high-profile investors may have been attracted to Ethos Life cofounders, Stanford MBAs Peter Colis and Lingke Wang, and their unique way of looking at life insurance. The company hopes to transform the life insurance industry by taking middleman agents out of the process and eliminating most medical tests to speed policy approvals. The Ethos Life policies will be easy to understand and the cost will be much more affordable than traditional life insurance plans, making it possible for anyone to get term a term policy without a hassle.
According to the San Francisco Business Times, Ethos’ life insurance policies are underwritten by Assurity Life Insurance Co. and are available in 49 states—New York has stringent life insurance rules and is yet to hop on board. Plans start at a mere $6 per month and can be obtained in as little as 10 minutes. Colis revealed that a high percentage of Ethos Life applicants are African American and “99 percent of our customers had no required medical exam, blood test or traditionally lengthy approval process.”
While the company boasts some high-profile backers, Colis admitted that star-studded funding round didn’t go off without a hitch, though. Robert Downey Jr.’s Downey Ventures and talent agency Creative Artist Agency sent a large team to the Ethos offices before the round, but the unprepared Ethos co-founder didn’t have enough chairs in his office for the large crowd.
“So I gave the 60-minute investment pitch while sitting on a hot radiator — while trying to act cool,” Colis joked. “One of our first uses of their investment capital was purchasing more chairs.”
In the end, it all worked out and now some of Hollywood’s biggest heavy hitters are part of the insurance game.