Policygenius raises $100M from investors as it grows its Durham headcount
Policygenius, the New York-based insurance technology startup that is creating a significant presence in Durham, has raised a new $100 million round of funding from investors, the company said Thursday.
The company will use the money to boost its headcount and invest in new consumer financial protection products it plans to unveil later this year.
Last August, Policygenius, which has built a marketplace for consumers to compare multiple insurance policies, landed an incentive package from North Carolina worth more than $5 million. In return, the company named Durham its second headquarters and promised to create 377 new jobs here, The News & Observer previously reported.
The jobs, a mix of sales and software positions, will have an average salary of $72,216 — a wage that is higher than Durham County’s average of $68,731. In recent weeks, the company has paid for billboards around Durham and on Interstate 40 advertising its plans to quickly hire workers at its new office.
Durham office will open in the second half of 2020
The company will put its Durham operations in the 555 Mangum building, a new office tower that the developer Northwood Ravin has built near the Durham Bulls Athletic Park.
Jennifer Fitzgerald, CEO and cofounder of Policygenius, said the company hopes to move into the building sometime in the latter half of 2020. She added the company was drawn to 555 Mangum because Policygenius would be the first tenant and could customize the space there to its own specifications.
She said the Durham office won’t have a particular focus, and the company would be hiring across all functions. “At scale it will look just like our New York headquarters,” she said in a phone interview with The N&O.
Fitzgerald said she has been impressed by the talent in the Triangle.
“It is still early days but we have been super excited with the initial outreach and inbound candidates coming our way,” she said.
Before it picked Durham, Policygenius spent months visiting potential landings spots for its second headquarters, Fitzgerald said. The company was only interested in markets that had direct flights to New York, multiple real estate opportunities and the ability to scale quickly by hiring local talent.
While the Triangle met all of that criteria, incentives were still necessary for it to become the winning choice, Fitzgerald said, because other cities were also offering money.
“The incentives were an important part of the deal,” she said, “because we hadn’t raised this capital yet, when we decided what market we would grow in.”
“Incentives like these are standard across any market, when you are willing to invest in real estate and create net new jobs,” she added. “...Every market that we looked at had a package for us to consider.”
Pittsburgh was the other major competitor for the jobs, according to records provided by the N.C. Department of Commerce. The records show that Pennsylvania offered incentives worth more than $3 million. They also note that wage rates in Pittsburgh are about 1% to 2% lower than in Durham.
How Policygenius makes money
The latest round of funding was led by the investment firm KKR, which said the company’s platform will become vital as competition increases in the insurance industry.
Policygenius’ platform lets customers compare insurance quotes and policies side by side across a range of insurance types, such as life, home, auto, renters and a variety of others. Through its relationships across the industry, customers can then apply and buy policies through the Policygenius platform.
Policygenius gets paid a commission from insurance companies for every policy it helps sell. The commissions, the company said, are included in the price of the policies so customers don’t get charged surprise extra fees.
The startup has helped distribute $45 billion worth of life insurance since it was started in 2014, the company said in its release.
“With increased competition in the insurance sector, we believe there’s a need for platforms where customers can easily manage their relationships across a number of insurance policies and carriers throughout their lifetime,” Allan Jean-Baptiste, a principal at KKR, said in a statement. “Policygenius has created a model to provide for exactly this, set apart by its sophisticated proprietary technology, and the traction of its marketplace platform among carriers and consumers alike.”
Policygenius, which said it now has annual revenue of $60 million, has raised more than $150 million from investors.
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more; go to bit.ly/newsinnovate
This story was originally published January 30, 2020 at 11:21 AM.
