Mark Shaw likes to walk around.
The serial entrepreneur joined activity and fitness tracking platform Strava in 2009 as a co-founder to lead technology as CTO. He spent eight years there, and since its last boost in 2020, Strava had reached 70 million members worldwide and amassed an almost cult-like following from its users, which also includes professional runners who want to track their progress.
Before that, Shaw helped found insurance software company Guidewire. Again, he used his engineering, analytical and marketing skills to help the company grow to another level before it went public in 2012.
After a brief hiatus from those two stints, Shaw teamed up with Josh Wyss and Graham Gerlach in 2020 to launch his third company: Inclined. The fintech startup is growing on its own, even if it hasn’t yet landed tens of millions of users or gone public. And it just raised $15 million in Series A funding to continue growing and expanding its technology.
Tilted, Shaw admits, is a very different type of company than Strava. The startup makes loans against life insurance policies with the goal of digitization “many of the traditional “time-intensive operations” associated with the process, he said.
“In the US alone, there’s a trillion dollars of cash value in a lifetime,” Wyss told TechCrunch. “We want to take advantage of this huge opportunity.”
The current credit market today against that $1.1 trillion is $150 billion and that’s Inclined’s initial focus.
“We believe that with our improved interest rates and efficiency, we can increase that lending rate,” Shaw said.
Hudson Structured Ventures led Incline’s Series A funding, which included participation from Anthemis Group and other new and existing investors. The startup has raised a total of $19 million since its inception in 2020.
The startup’s Series A emerged in what Shaw described as “the most brutal fundraising environment” he’s experienced in two decades.
“Our business is counter-cyclical and a very safe form of lending,” he told TechCrunch. “This is a time when people need access to these credits. It’s the right time for us to grow – we can make a big impact in these unfortunate, harder times.”
Life insurance differs from term life insurance in that it Accumulate value that is always available instead of just paying for cover. Shaw likens it to buying or renting a house.
And when life policyholders want to access their cash value, they often opt to take out a loan rather than withdraw the money directly, which is less efficient, he explains.
Inclined, he adds, not only gives more people the opportunity to borrow against life insurance policies – something historically reserved for the wealthy – but also gives banks the opportunity to better participate in the market on a larger scale. And because banks often “have much lower interest rates than insurance companies,” Shaw explained, that means borrowers can borrow at lower interest rates. In addition, their money can be compounded over decades.
“That means they can get five to 10 times more value from their life insurance over their lifetime,” Shaw told TechCrunch.
Inclinted is live at Mechanics Bank, which has about $20 billion in assets under management. And it currently has multi-million dollars on its platform.
Vikas Singhal, Founding Partner of HSCM Ventures, believes that Inclined involves four “distinct but important components” in a single digitally-enabled financial transaction: insurance companies, agents/brokers, lenders/banks, and policyholders.
“The financial transaction delivers immediate value to the end customer – a policyholder who has already borrowed reduces their cost of borrowing – but also provides highly aligned and equally important value to all the other components,” Singhal wrote via email. “This is financial democracy at its finest. While existing policy loan refinancing has been underway for some time, it has not always been accessible to all and a digitally assisted turnkey solution opens up the possibility for everyone to benefit.”
His company also sees Inclined’s offer only as a starting point.
“The cash value in permanent life insurance products is an underutilized commodity and we believe the whole market can benefit from banking products built on that,” added Singhal.
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