In the time it takes to stand in line and buy a cup of coffee, you could have an insurance quote on your phone.
That’s the vision 33-year-old Omaha entrepreneurs Colin Nabity and Cody Leach are bringing to life through their insurance technology startup company Breeze.
Launched in 2020, Breeze has secured $10 million in financing from six firms. Boston-based Link Ventures led the financing round. Investment industry professionals say that $10 million is the largest investment ever made in a Nebraska-based software startup during an early stage fundraising round.
“A couple of years ago, you would see a company at the beginning raise $500,000 or $1 million. Now you have someone like Breeze raising several million dollars,” said Ben Williamson, principal and general counsel with Invest Nebraska. Invest Nebraska is one of the six firms that invested in Breeze.
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Breeze appears to have found a niche in a crowded insurance industry in the Midwest by adapting to the rapidly changing technology field and partnering with insurance carriers Assurity in Lincoln and Principal in Des Moines to sell disability and critical illness insurance policies.
“Insurance carriers are looking for new methods of distribution,” Nabity said. “They’re working through us to continue to build their book of policies in addition to selling through agents. We’re able to offer an outlet to carriers that are offering the products we are selling through our digital platform.”
Breeze’s focus on the critical illness and disability insurance market also fills a niche, according to Nabity.
Lisa Dolan, managing director of Link Ventures, called disability insurance “a super small market” with room for growth. According to Dolan, 1 in 4 people experience a disabling event over the course of their career, but annual spending on disability insurance premiums, as of 2020, totaled only $500 million.
“There is a disconnect there,” she said.
Dolan said Link Ventures decided to invest in Breeze after being impressed with the co-founders’ backgrounds. Dolan discovered the startup by analyzing web traffic data of direct-to-consumer companies.
Dolan pointed to Nabity’s prior success in building an insurance brokerage business without any venture capital. And Leach, who designed Breeze’s website and platform, came with an endorsement from insurance partners who worked with him, Dolan said.
“Ultimately, our decisions are made based on betting on people,” she said.
Leach and Nabity said it typically takes the average user about 10 minutes to inquire and purchase a policy on Breeze’s website.
“You can literally stand in the Starbucks line on your phone, get a quote, apply online and have a policy before you have your coffee. It’s that fast,” Nabity said.
With the funding, Nabity said Breeze will be able to more than double its staff in the next year.
Breeze has 21 employees. Although some work remotely from other states, Nabity said Breeze prioritizes hiring employees within Nebraska.
Leach believes the funding will carry Breeze through the next 18 to 24 months and possibly as many as 30 months if the firm continues on its upward trajectory.
Leach said the funding will also allow Breeze to more rapidly expand its operations, which has thousands of customers across 49 states and Washington, D.C. Nabity said Breeze hopes to be able to sell its policies to people in New York, the only state where it currently doesn’t operate, sometime within the next 12 months.
The Breeze co-founders and Nebraska investors hope Breeze’s record fundraising is a sign of things to come in the state’s startup scene.
“My hope and my goal is that we’re going to scale this thing and make this an iconic insurance technology company based here in Omaha and also help the next generation of high-growth startups here,” Nabity said.
They hope those types of investments will help reverse Nebraska’s brain drain — a phenomenon where people who hold a bachelor’s degree or higher leave the state in order to pursue job opportunities and higher salaries elsewhere.
According to David Drozd, research coordinator for the Center for Public Affairs Research at the University of Nebraska at Omaha, Nebraska has been losing a net average of about 1,700 of those graduates each year over the past 10 years — 12th worst in the nation.
Drozd said that puts the state behind neighboring states Iowa and Kansas.
Not helping Nebraska is the shrinking difference between the state’s cost of living and the national average. According to Drozd, Nebraska’s cost of living used to be 10% below the national average.
That gap has shrunk to 5%, largely driven by increases in housing costs.
Still, the cost-of-living gap may be enough to keep people, including entrepreneurs, in Nebraska if they believe that investment and job opportunities are catching up.
“For these kind of future generations of entrepreneurs, I think that’s going to create this kind of staying effect where they don’t necessarily feel like they have to go to the coasts, Chicago, Austin (Texas) or wherever to build that company,” said Invest Nebraska’s Williamson.
But Erica Wassinger, cofounder and general partner of Omaha investment firm Proven Ventures, said it still takes a good idea, a sustainable foundation and responsibility on the part of entrepreneurs to ensure their startup lasts no matter where it’s located.
Wassinger said it appears Nabity and Leach are doing just that.
“I don’t think they’ve ever lost track of the fundamentals,” she said.