Layoffs at Boost Insurance
Based on information obtained by Coverager, Boost Insurance has laid off 15 employees yesterday, about 20% of its staff, due to difficulties weathering macroeconomic factors.
Alex Maffeo, Boost’s founder and CEO, recently published a blog post about the layoffs. “We have been experiencing hyper growth across the business for the last two years, which is exactly what we were building towards since this company was founded, and is one of the reasons this decision was even more difficult to make,” he wrote. “For all intents and purposes, we have been executing extremely well relative to the broader market. However, the macroeconomic environment began to show cracks in early 2022, and those cracks started looking more like fault lines as the year went on.”
Founded in 2017, Boost helps companies launch insurance programs with a white-labeled solution that includes compliance, operational, capital, and technological components. This all-inclusive offering allows companies to launch insurance programs faster compared to the traditional way of forming an MGA, finding insurance capacity, getting a policy admin up and running, and managing claims.
The downside of this model, for Boost, is that it doesn’t appeal to established companies with resources – Petco doesn’t need help finding insurance capacity quickly. As a result, Boost mainly attracts companies with limited resources such as Bingo, or limited insurance potential such as Breach. The answer to this challenge is scale, but based on our findings Boost has yet to achieve scale with its model. Since launching in 2018, the company has powered over 40 companies – a low figure considering the nature of these companies and the universal appeal of the insurance product.
Boost publicly disclosed $37 million in funding. According to Crunchbase data, the company raised an undisclosed amount last month. Prior to this round, Boost closed a $20 million Series B round in May 2021.