With just $1 million in outside funding from Link Ventures, EverQuote built a $100 million-plus business with 185 employees. Now we’ll see what it can do with another $23 million in the bank.
Today the Cambridge, MA-based firm announced a $23 million Series B funding round led by Maryland-based Savano Capital Partners, with contributions from Stratim Capital, Oceanic Partners, and T Capital Partners. Five-year-old EverQuote says it will pour the new money into sales efforts and product development.
EverQuote operates an online insurance marketplace primarily focused on auto insurance policies, although this year it expanded into home and life insurance, CEO and co-founder Seth Birnbaum says in an e-mail.
Consumers can use EverQuote to shop for policies, although sometimes the best deals are only available offline after connecting with insurers, Birnbaum says. Rather, EverQuote’s pitch is it eases the matchmaking process for insurance buyers and sellers.
The service is free for consumers. Birnbaum says EverQuote makes money through referral fees from insurers, who are looking for more effective (and cheaper) ways to win customers than traditional methods, such as media advertising campaigns.
The approach appears to be working. EverQuote says more than 5 million people visit its website each month. To date, it says it has made more than 50 million referrals, resulting in over $3 billion in insurance premium payments for carriers and agents, and an estimated $500 million in savings for consumers.
Birnbaum says EverQuote generated $100 million in revenue last year, and it could reach $130 million in sales this year. The company plans to hire 120 people by the end of 2017, Birnbaum says.
EverQuote isn’t the only company out to simplify insurance shopping through online tools. Related ventures include Insurify, a nearby startup that launched earlier this year, and The Zebra, based in Austin, TX.
EverQuote also has some things in common with Boston-based TrueMotion, formerly known as Censio. Both companies offer a mobile app that helps track users’ driving habits—think speeding, fast turns, hard braking, and phone use while behind the wheel. (Insurance companies also track such behaviors with plug-in devices.) The idea with these apps and devices is to encourage safer driving, which ultimately could result in fewer accidents, fewer auto insurance claims, and cheaper insurance premiums.