Pet Insurance Startup Wagmo Raises $12.5 Million
Photo by Glenn Han on Unsplash
Wagmo, a pet insurance startup, raised $12.5 million in a Series A financing round. Founded by Christie Horvath, who was inspired to create the company after receiving a $10,000 vet bill for her dog, and Ali Foxworth in 2017, Wagmo seeks to become an important player in the rapidly growing pet industry.
Investors in the Series A financing round included Female Founders Fund, Clocktower Technology Ventures, and Vestigo Ventures. Several angel investors also participated in the Series A round. They included Jeffrey Katzenberg, the former CEO of DreamWorks Animation, and Jim Grube, the former Chief Financial Officer of Chewy and a board member of GameStop.
Established Players in the Pet Insurance Industry
The pet insurance industry already has several more established players. However, Wagmo believes it offers customers a unique value proposition. Most pet insurance providers emphasize coverage for emergencies and serious conditions such as broken bones and surgeries. Wagmo offers a health insurance plan with similarly comprehensive coverage for more serious conditions, but it also offers a basic wellness plan.
Wagmo’s premise is that especially in a puppy’s early years, most healthcare costs stem from routine basic care such as annual exams, vaccines, blood work, fecal tests, and grooming. The wellness plan is focused on optional preventative care, rather than coverage of accidents or severe injuries. Most other pet insurance providers do not offer wellness care as a standalone product.
Several startups and more established insurance industry veterans have gained a foothold in the pet insurance space. Proven names in the insurance industry such as Geico, Progressive, and Nationwide offer comprehensive pet insurance plans. Lemonade, the insurance startup known for its bright-pink logo and use of artificial intelligence to quickly process claims, offers plans starting from $10 per month. Other popular pet insurance startups include Pumpkin, Figo, and Healthy Paws.
Wagmo’s Wellness Plan
Unlike other pet insurance brands, Wagmo customers can subscribe to the wellness program and opt out of the insurance plan. This is a distinct advantage to Wagmo’s platform. It enables users to join Wagmo solely for basic needs first. Later, if desired, users can upgrade to a plan that also covers health insurance for accidents and illnesses. This approach is more cost efficient for customers who don’t want a plan that includes emergency and accident coverage.
Wagmo’s wellness membership plans come in three tiers: Value Plan, Classic Plan, and Deluxe Plan. The Value Plan costs $20 per month while the Deluxe Plan costs $59 per month. Wagmo’s pet health insurance plan starts at $13 per month. Customers can mix and match features of the both the wellness and health insurance plans and create a plan optimized to their pet’s needs.
A Diverse Group of Employees
Co-founder Christie Horvath is Chief Executive Officer and co-founder Ali Foxworth serves as Chief Operating Officer. Wagmo is a diverse company: 58% of employees are female. Wagmo also boasts strong representation from underrepresented minority backgrounds.
CEO Horvath explained her strategizes about the future direction of the company. “It is a privilege to get to shape and develop a company culture from scratch, and there is nothing more rewarding than building a passionate, diverse team that absolutely crushes it,” Horvath stated.
Founders Have Top-Tier Business Credentials
Both Horvath and Foxworth come from finance and business backgrounds. Horvath is a graduate of Harvard Business School and Foxworth is a graduate of the University of Pennsylvania’s Wharton School of Business. Prior to attending business school, both Horvath and Foxworth worked at BlackRock.
“The greatest challenge is figuring out how to break down the opportunity ahead of us, particularly in the employer benefit space. What keeps us up at night is thinking about where to start, what to prioritize, how to allocate limited resources and limited time,” states Horvath.
Wagmo is looking for ways to partner with larger organizations and companies. The hope is that companies will eventually offer Wagmo’s pet insurance as part of their employee benefits package.
Wagmo is generating revenues from its wellness and insurance plans. A relatively small startup comprised of around 20 employees, Wagmo aims to quickly expand its presence. In 2019, the company raised an oversubscribed $3 million seed round co-led by Harlem Capital and Vestigo Ventures.
The Long-Range Plan: Offer Pet Insurance Nationwide
Wagmo hopes to eventually offer its insurance nationwide. To date, the company has processed approximately 30,000 wellness claims. It has reported 20% month-over-month user growth since the pandemic began.
There is a large market opportunity to expand nationally. Clara Sieg, a partner at Revolution Ventures who will be joining Wagmo’s board of directors, notes that existing pet insurance products have not satisfied the needs of many pet owners. “Currently, only 3% of pets are insured due to poor customer experience and outdated offerings from legacy carriers. Yet pets have become an increasingly prominent part of owners’ lives, particularly for younger generations.”