Bestow, a life insurance startup located in Dallas, has received $120 million in fresh late-stage fundraising to build head count and fund its expansion.
Announced on Tuesday, the “oversubscribed” capital raise amounts to a major shot of confidence in the Deep Ellum-based tech company, which benefits from the involvement of Goldman Sachs.
The alternative investing arm of the Wall Street giant — which is expected to open a new $500 million campus in Dallas in 2027 and is part of a phalanx of East Coast power players setting up shop in North Texas — co-led the investment round, and will now have a representative on Bestow’s board of directors.
Smith Point Capital, a tech- and data-focused venture capital firm with offices in San Francisco and New York, was the other co-leader on the investment round. In addition to the $120 million, Bestow also secured a $50 million loan from TriplePoint Capital, a Silicon Valley-based firm.
In the current tumultuous economic environment, Series D fundraising rounds — typically seen as the precursor to an exit or an initial public offering — have been vanishingly small, creating an increasingly difficult situation for startups.
Bestow declined to disclose its valuation, but the size of the round is considered elite by industry standards, and well above the median size cited by Carta data.
The nine-year-old company has now raised a total of more than $300 million in equity funding, the company told The Dallas Morning News.
The cash infusion was framed by Bestow investors as a push for modernization in a centuries-old industry. Ashwin Gupta, a Goldman Sachs managing director who will now Bestow’s board, cited “a growing need for a modern insurance technology platform” in a statement.
Keith Block, CEO of Smith Point Capital, said that Bestow is “fundamentally transforming how insurers create and deliver products.” The life insurance industry “has remained virtually untouched by innovation for three decades,” he added.
“This investment strengthens Bestow’s position as the preferred partner for life insurance and annuity providers seeking to modernize and scale,” Melbourne O’Banion, Bestow’s CEO and co-founder, said in a statement
Bestow is “accelerating product innovation to help the industry stay ahead of market trends” and build competitive advantages through tech, he adds.
Bestow was founded in 2016 with the aim of using tech to make it easier for people to obtain life insurance, including the use of algorithms, and cutting out traditional requirements like doctor’s visits or blood tests.
After initially underwriting and selling its own policies, the company, which also developed software, later pivoted to partnering with other life insurance companies. Last year, it sold its insurance carrier to Dallas-based Sammons Financial Group, an early investor.
Bestow now describes itself as “the life insurance software partner trusted by large carriers to help them digitize, launch new products, and grow faster than ever before.”
Years ago, the startup caught the attention of Silicon Valley. In late 2020, with sales surging, it completed one $70 million round from investors from at least a half dozen venture capital firms, including Breyer Capital and Valar Ventures, a firm backed by the PayPal cofounder Peter Thiel.
Back in the summer of 2022, just months after announcing plans to hire up to 150 more workers, Bestow laid off 41 employees, or 14% of its workforce.
At the time, O’Banion cited the “changing market conditions” that were part of a retrenching tech sector that’s since rebounded.