(Image credit: Garreth Paul/Unsplash.)
Oyster, an insurance technology company providing personal insurance through seamless point-of-sale and post-purchase experiences, has announced its launch through a $3.6 million seed round. New Stack Ventures led the round and was joined by Global Founders Capital, Conversion Capital, Cambrian Ventures, SNR VC, Kearny Jackson, Valia Ventures, Interlace Ventures, and V1 VC, alongside a group of angels including Garrett Koehn, President of CRC Insurance, Gokul Rajaram, executive at DoorDash, Eugene Marinelli, Founder of Blend, and Joe Schmidt, Partner at a16z, according to an Oyster statement. The Seed round will be used to help Oyster build out its omnichannel insurance platform for consumers and merchants, the statement says.
Following its founding in 2021 by Blend, Stripe, and Strategy& alumni, the Oyster team describes its endeavor as redesigning personal insurance from the ground up, creating an accessible experience that modernizes insurance for everyday consumers. Oyster says its technology leverages proprietary data to handle insurance end-to-end, in one unified platform.
“The property and casualty insurance industry has historically been highly fragmented with low customer satisfaction, and beyond this, getting insurance is still a tedious, manual process that’s overdue for change,” comments Vic Yeh, CEO and co-founder, Oyster. “Consumers expect simple, transparent, and digitally-led experiences when interacting with everyday facets of their lives. We’ve built an all-star innovative team ready to drive innovation in the P&C industry.”
According to Research and Markets, the global insurance market is expected to grow at a CAGR of 9.1 percent to $8.4 trillion by 2026 and McKinsey estimates that the property/casualty industry represents $1.6 trillion in premiums—about one-third of the entire insurance industry.
Consumer Preference for Embedded Insurance
Oyster enters the market with a model that it characterizes as both consumer- and merchant-friendly. Oyster’s survey of over 9,000 shoppers in the U.S. shows that 45 percent of consumers are more likely to complete a purchase from a merchant that offers insurance, making Oyster a tool for eBike, jewelry, electronics, and other retailers to increase sales while allowing customers to protect their most precious treasures. Beyond customer attraction, merchants can install Oyster’s no-code integration in under 20 minutes to deliver consumers an instant quote and accurate understanding of their personal insurance at the point-of-sale.
“You can buy a $5,000 ebike or engagement ring online in just a few clicks and get it delivered the next day,” notes Rex Salisbury, founding partner, Cambrian Ventures. “Want to get insurance for that purchase? Good luck! It’s an offline process that can take many days and lots of paperwork. Oyster is offering embedded insurance for high growth ecommerce categories to allow consumers to seamlessly insure some of their most important possessions at point of sale in a few minutes. It’s a huge opportunity to move personal insurance into the digital age.”
For consumers, Oyster’s proposition is to offer affordable rates tailored for each product line. With Oyster, a $5,000 ring can cost as low as $50 per year to insure, or $4 per month. Oyster says it provides full coverage from theft, loss, and accidental damage with deductibles as low as $0. In contrast, standard homeowners and renters’ insurance typically have high deductibles, low single-item limits, and exclusions for category-specific risks. The company says it works to deliver a win-win scenario for merchants and consumers, understanding what each side of the transaction needs to be satisfied with providing or receiving insurance.
Oyster asserts that its simplified insurance experience will establish a new standard of comprehensive insurance coverage, solving for the lack of transparency in outdated legacy insurance plans.