Beam Dental, a digital-first dental insurer, secured $80 million in an oversubscribed Series E round of funding to expand its insurance platform and automate underwriting.
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Mercato Partners’ growth equity fund, Traverse, led the round and was joined by new and existing investors including Drive Capital, Georgian, Nationwide and Breakout Capital. The new round gives Beam $168.4 million in total known funding since the company’s inception in 2012, according to Crunchbase data. Its last raise was a $55 million Series D round in 2019, led by Georgian.
Columbus, Ohio-based Beam started as an app-enabled Bluetooth toothbrush company and pivoted to take on the $75 billion dental insurance business by using user-specific brushing data to offer lower dental insurance premiums to those with good brushing habits.
Over nearly a decade, co-founders Alex Curry, Alex Frommeyer and Dan Dykes have focused on making dental coverage easy, smarter and preventative, said CEO Frommeyer.
“Dental is the second-most desired health benefit,” Frommeyer told Crunchbase News. “Employees want it and employers want to offer it for attraction and retention. Previously though, dental was this sleepy little corner that no one was innovating.”
The company’s digital platform enables brokers, members and employers to file claims and receive more accurate pricing, as well as receive rewards based on dental hygiene regime.
Beam’s brush program, which Frommeyer said is a “unique part of the company’s DNA,” has produced more than 100 million brushing minutes to date, helping employers control their insurance costs and helping members earn rewards through gamification.
Joe Kaiser, director of Mercato Partners, said his firm focuses on stage and region-specific investments, often focusing on opportunities in the Midwest. Kaiser and Frommeyer first connected in 2018, and the Series E was Mercato’s first opportunity to lean into an investment, Kaiser said in an interview.
“Beam has taken a pretty staid industry that is huge, but slow to adopt technology, and turned it on its ear, automating a lot of processes that other industries and other insurance areas have automated already,” Kaiser said. “By focusing on the experience of the consumer or broker, they are using automation to deliver a better experience. In addition, historically, big companies had much better insurance experiences than smaller companies. Beam has democratized this across the spectrum so everyone is getting the same experience.”
Over the past three years, Beam has grown from 12 to 250 employees and is now serving employers in 41 states. Revenue grew by more than 600 percent during that time, as well, with Beam doubling its member base in 2019 and again in 2020. In addition to dental insurance, the company has expanded its insurance products with vision and life insurance, and will be soon introducing short and long-term disability insurance, Frommeyer said.
Beam intends to deploy the new capital into bringing in more brokers, as well as hiring across the board, particularly in sales and engineering. It will also work to expand into more states and add new products.
“There is lots to do,” Frommeyer said. “Our goal of business is not to stop until we have modernized dental insurance. We think there is a huge opportunity with employers to add more employee benefits products, and with brokers, who create a network effect because each broker works with 100-200 businesses. We are out to make sure our crown jewel is the world’s best dental insurance.”
Illustration: Dom Guzman
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Source: https://news.crunchbase.com/news/modernizing-dental-benefits-beam-bites-into-80m-series-e/
