As we spend more time at home, how we view our pets has changed and pet adoption and ownership have surged. However, 81% of pet owners would not be able to cover an unexpected $5,000 out-of-pocket expense for their furry loved one. The pet health insurance sector has emerged to address this risk and is currently valued at ~$2B per annum with approximately 2.8 million pets insured in North America. Pawlicy Advisor allows pet owners to rapidly make sense of the various pet insurance options available with its data-driven marketplace. Pet parents can compare and contrast their insurance options to makes sure they are selecting the best coverage with transparency and efficiency in less than 5 minutes. The startup, founded in 2018, has found that selecting the right option can save pet owners up to 83% in lifetime cost.
AlleyWatch caught up with Cofounder and CEO Woody Mawhinney to learn about how his own experience with his Shar Pei, Wrigley, led him to found Pawlicy Advisors, the effect of the pandemic on the pet industry, and the company’s latest round of funding, which brings the total funding raised to $8M.
Who were your investors and how much did you raise?
Pawlicy Advisor raised a $6.5 million Series A funding round led by Rho Capital Partners and existing investor Defy Partners. The round also included significant investment from Slow Ventures and participation from Entrepreneurs Roundtable Accelerator.
Tell us about the product or service that Pawlicy Advisor offers.
Pawlicy Advisor is the leading pet insurance marketplace offering comparisons based on breed-specific attributes, hidden discounts, and total cost predictions for the lifetime of the pet. Pawlicy Advisor’s data-driven model brings transparency and simplicity to shopping across top pet insurance providers.
Veterinary professionals typically like the idea of insurance because it can help their clients accept treatment recommendations, but ultimately veterinarians want to focus on treatment and don’t want to be involved in what they view as personal finance decisions. Pawlicy Advisor is a free educational platform their clients can turn to in order to learn more about how to budget for their pet.
What inspired the start of Pawlicy Advisor?
In 2015, my Shar Pei puppy named Wrigley, came down with a genetic disease that required expensive medication to stabilize. As an animal lover and self-described “dog dad,” I was relieved that my pet insurance covered Wrigley’s monthly prescription costs.
While speaking with other pet owners in my community about my experience, I discovered how lucky I was to have chosen insurance that covered Wrigley’s uncommon condition. Other pet owners shared stories about inadequate and overpriced coverage, and the difficulties they faced evaluating options. Those stories stuck with me through business school, where I spoke with hundreds more pet owners and veterinarians around the country about how the pet insurance experience could be improved. In April of 2018, I decided to launch Pawlicy Advisor.
Around the same time, Travis (cofounder) bought pet insurance after adopting his first pet, Ginny. Frustrated with the buying experience and wishing for a more transparent process, he reached out to me after reading about the business idea. Three months, countless coffee chats, and a nine-hour hike later, Travis joined as CTO to help pet owners everywhere find the right insurance at the right price.
How is Pawlicy Advisor different?
Pawlicy Advisor partners with leading pet insurance companies to help pet owners find the right plan at the best price. Our signature features are our “Coverage Score” which ranks pet insurance plans based on their coverage for your specific breed, and our “Lifetime Price Score” which ranks how much we expect each insurance policy to increase in price over your pet’s lifetime.
The bottom line is every pet is different. The best dog insurance plan for a Chihuahua in New York may be different from the dog insurance plan for a Dalmatian in Memphis. It also depends on if you’re insuring multiple pets, if you’re insuring a puppy/kitten or an older pet, if you’re looking for the best coverage or just a cheap pet insurance with the lowest monthly cost, how important it is to cover the exam fee, your location, and more. It will also depend on what reimbursement rate, annual deductible, and coverage limit you’re looking for on an insurance policy. By comparing these coverage and pricing differences, we can make sure a breed’s specific health risks are covered and find great deals.
Also, some insurance websites negotiate different commissions with each provider, meaning they have a bias to recommend one over another. Because we get paid the same amount, regardless of which cat insurance or dog insurance provider you go with, we’re able to provide objective, data-driven, recommendations that help you save time and money.
What market does Pawlicy Advisor target and how big is it?
Pet insurance is currently approximately a $2 billion market in the U.S. It is one of the fastest-growing lines of voluntary insurance, doubling in market size every three years. We’re now seeing industry leaders (e.g. Walmart, Zoetis, Aflac, Lemonade, Metlife) enter the market and veterinary professionals talk to clients about pet insurance for the first time, significantly boosting product awareness and distribution. Pawlicy Advisor is helping to further accelerate this growth by providing transparency to a product that, historically, has been confusing for consumers to evaluate. When we think long-term about the company, we’re excited to become the trusted brand for pet owners budgeting for their pets’ health or happiness. That’s why our company isn’t called “Pet Insurance Advisor”.
What’s your business model?
Because we’re a licensed insurance agency nationally, we get paid a commission by the insurer when consumers buy through us. But, unlike most insurance brokerages, we’re standardizing the amount we get paid. When we recommend a plan to pet parents, it’s because we actually think it’s a better deal, not because we get paid more. This business model allows us to be completely free for consumers to use.
How has COVID-19 impacted the business?
Like many other businesses, Pawlicy Advisor faced pandemic-related challenges, particularly during the first half of 2020. However, the pet care industry has seen significant rebound and growth through the second half of 2020 and is expected to continue its high-growth trajectory as pet adoption continues to soar and more pet owners work from home.
Pawlicy Advisor spent the Spring and Summer of 2020 doubling down on digital product improvements, partnerships, and useful pet care content to help both veterinary professionals and pet owners. The company has grown approximately 30% monthly from these investments. Today, Pawlicy Advisor is positioned as an extremely useful platform to the veterinary industry and to pet owners who are trying to navigate budgeting for their pets’ care.
What was the funding process like?
Pawlicy Advisor has grown rapidly since the start of the Pandemic. Our belief when going to market in Fall 2020 was Seed and Series A deal volume was increasing from a relatively slow start to the year, seemingly in parallel with the broader recovery of financial markets. We’re thrilled to have fantastic investors, including Defy Partners and Entrepreneurs Roundtable Accelerator, who have witnessed the company evolve over time. This group, and our experience working together, helped us navigate a remote fundraising environment. We had to rely on existing relationships not only to help investors build trust in Pawlicy Advisor, but to also help us understand who would be phenomenal partners for Pawlicy Advisor’s future. We’re excited to continue working with Defy Partners and Entrepreneurs Roundtable Accelerator, while also finding great new partners in Rho Capital Partners and Slow Ventures.
What are the biggest challenges that you faced while raising capital?
Raising capital in a remote environment was challenging for a couple of reasons: (1) it was hard to pitch virtually to investors we hadn’t met before, and (2) it was challenging fostering trust with potential partners. Thankfully, we could rely on advisors and existing investors to help us navigate the process.
What factors about your business led your investors to write the check?
A few of the factors that led to investors partnering with Pawlicy Advisor were:
- Pawlicy Advisor’s strong value proposition to pet owners and veterinary professionals,
- Pawlicy Advisor’s distribution strategy and partnerships, and
- Pawlicy Advisor’s market tailwinds.
What are the milestones you plan to achieve in the next six months?
We are adding new insurance carriers and other important pet care products to our platform. We expect continued rapid growth across a variety of distribution channels. Also, our team is doubling to help us respond to soaring consumer and veterinary interest in Pawlicy Advisor’s platform.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Work to strengthen and grow your networks–relationships are more important than ever; find strategic acquisition channels; focus on customer payback period; be defensive but opportunistic with your burn; in this fast-evolving market, constantly evaluate customer needs; and keep pushing!
Work to strengthen and grow your networks–relationships are more important than ever; find strategic acquisition channels; focus on customer payback period; be defensive but opportunistic with your burn; in this fast-evolving market, constantly evaluate customer needs; and keep pushing!
Where do you see the company going now over the near term?
We’re focused on adding insurance providers and to our platform, growing distribution partnerships, and building our team in order to support the millions of pet owners and thousands of veterinary professionals who need help navigating pet insurance.
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Source: https://www.alleywatch.com/2021/02/pawlicy-advisor-pet-insurance-marketplace-data-woody-mawhinney/
