Minneapolis-based Slingshot, which uses AI to help businesses offer embedded insurance, emerges from stealth with a $27M seed co-led by Rally and Skyward Group

Embedded insurance policies, previously too complex to offer profitably, can now be integrated into everyday transactions.

Minneapolis-based Slingshot Insurance has emerged from stealth mode, announcing a $27 million seed funding round co-led by Rally Ventures and Skyward Group. The company utilizes AI to help businesses, particularly vertical SaaS providers, offer embedded insurance policies. These are small insurance products that can be purchased at the point of sale, like coverage for a flight booking or a child's sports registration. Slingshot's software aims to streamline the process by connecting businesses with insurers and using AI to manage data flow and reduce administrative overhead. The company intends to eventually become an insurer itself by acquiring a carrier, enabling it to provide both the software and financial backing for these policies. Its first customer and design partner is Vertical Insure, which provides embedded insurance to its over 750,000 customers.

Slingshot's AI-powered platform addresses the administrative burden and regulatory complexity that has historically made offering low-cost embedded insurance policies economically unviable for many businesses. By automating data processing and facilitating direct connections between policy distributors and insurers, Slingshot aims to unlock a significant new revenue stream for vertical SaaS companies that are looking to diversify beyond subscription fees. The company's goal is to enable these businesses to seamlessly offer relevant insurance products within their existing customer journeys.

The $27 million seed funding, co-led by Rally Ventures and Skyward Group, signals strong investor confidence in the embedded insurance market and Slingshot's approach. With plans to acquire an insurer, Slingshot is positioning itself to control the entire value chain, from software provision to underwriting and claims. This vertical integration, combined with the AI-driven efficiency gains, could set a new standard for how insurance is embedded into non-insurance platforms, impacting both small businesses seeking to enhance offerings and consumers looking for convenient, contextual coverage.