Insurtech SaaS startup Slope Software, based in the Atlanta suburb of Chamblee, recently had its own future slightly more insured, thanks to a seed round investment from Cofounders Capital.
Founded by an actuary and a software engineer—veteran insurance industry professional Andy Smith and CTO Taylor Perkins, respectively—Slope announced the $1,000,000 investment round, led by North-Carolina-based Cofounders, on January 29. Cofounders partner Tim McLoughlin will join Slope’s board of directors.
“Slope is the perfect example of our investment thesis,” McLoughlin said in a statement. “Andy has felt the pain of using legacy software as an actuary himself, and along with Taylor created a solution that is better, faster, and cheaper for other actuaries.”
Smith’s pain, according to Perkins, was the main point of Slope’s origin. In an interview with Hypepotamus, Perkins recalled receiving a text from his actuary friend in late 2015, relaying his frustrations not with the job itself, but the tools he needed to work efficiently.
“‘All the software I use is terrible,’” Perkins remembered Smith saying. “‘What do you think about creating something better?’ It finally drove him crazy enough.”
The two friends, both raised in Roswell, Georgia, incorporated in January 2016. As they began building the platform, Taylor, a Georgia Tech graduate, wanted to make sure they had proper feedback. They began attending conferences in 2017 and signing up users for beta testing, which started in summer of 2018. Their first paying customer signed on in January 2019.
They pitched the 2019 MetLife Digital Accelerator powered by Techstars, which focuses on insurance industry innovation, in May. They were accepted into the 3-month program in July, and after Demo Day in October they started a relationship with David Gardner, Cofounders’ general partner.
According to McLoughlin’s statement, Cofounders’ due diligence included speaking with dozens of current and potential Slope customers. He said he discovered that they’d been “anxiously waiting for this modern solution in their industry.”
Perkins agrees, and acknowledged the advantage that the MetLife accelerator gave Slope as it was coming to market. “The ability to work with such an insurance giant was really huge for us, not only from an exposure perspective, but to get input on the platform and connect us to other companies and resources in the space,” he told Hype.
Perkins says Slope isn’t looking for more funding at the moment (“We feel like this raise will get us to some particular milestones,” he says), and says the platform itself is ready to scale, but the company needs to onboard more personnel—particularly on the development team.
“Our hiring needs are unique. In order to support the insurance industry, we need to hire actuaries, which can be a challenge, especially if you’re in a particular vertical, such as life insurance and annuities. But having actuaries help people implement their models shows that we’re experts in the field.”
Results from using Slope have vastly increased efficiencies for actuaries. Perkins mentioned one client who was using a spreadsheet and several laptops to run pricing estimates, which took around 10 days to complete. With Slope, he says results are now available in an hour.
He says he’s also seen cases where an actuary saved a few months a year in process, and was thereby able to focus on other things. “It also enables him to do better analysis, because of the time savings. He can run more scenarios and make sure his error rate lowers. All that kind of stuff can really save ins companies a ton of money.”
It may not be the sexiest SaaS in the world of startups, but it’s one that seems to have staying power and potential to spread throughout the insurance industry, because of its niche.
“It can be difficult for people to see the difference we’re making; I totally understand,” Perkins admits. “Actuaries are responsible for analyzing and quantifying risk. They do things like determine the price of new insurance products, and analyze the blocks of business that come over a period of time, so companies don’t suddenly run out of money, or go bankrupt because they had to pay out a bunch of claims.
“It’s a very important role to insurance companies that’s often overlooked, because they’re a bunch of guys running calculations. But they need to be right — the insurance companies’ future depends on it.”