Slingshot Secures $27M Seed Round to Insure Point-of-Sale Micro-Policies

Slingshot Insurance, an AI-powered embedded insurance startup, is coming out of stealth mode backed by $27 million in seed funding, as shared exclusively with Crunchbase News.

The funding round was co-led by Rally Ventures and Skyward Group, with additional participation from insurance industry veterans such as Jim Hays, who is taking a seat on Slingshot’s board. Rally also serves as a co-founder of the Minneapolis-based enterprise, aligning with its broader strategy of helping launch startups. To date, the venture firm has co-founded roughly eight portfolio companies that are either active or currently operating in stealth.

Led by first-time founder and CEO Ethan Genteman, Slingshot concentrates on low-cost insurance policies that consumers purchase alongside other transactions, such as trip protection when booking a flight. Known as embedded insurance, this approach presents coverage directly to customers precisely when the need arises.

The startup’s platform assists businesses in offering these policies by linking them with underlying insurance backers. By leveraging artificial intelligence to manage and exchange data between both parties, the technology strives to cut down the administrative expenses that usually make inexpensive policies unprofitable to provide.

According to Slingshot, its inaugural customer and design partner is Vertical Insure, which serves upwards of 750,000 customers with an average premium of $25. Genteman informed Crunchbase News that Slingshot’s initial program is scheduled to roll out this month.

At present, Slingshot generates revenue as a technology vendor collaborating with external insurers. However, the six-person company—which officially commenced operations on July 1—is also pursuing an acquisition that would enable it to underwrite policies directly.

“We’re not a carrier yet, but we are rapidly closing on our carrier,” Genteman noted during an interview.

Making the math work on a $25 policy

One specific product in development will allow parents to buy insurance when registering a child for youth sports, Genteman explained. For instance, a parent spending $2,000 on a volleyball league might receive an offer for a $25 policy protecting against season cancellation or injury.

Every policy demands paperwork, coordination with an insurer, and the management of potential claims. Genteman pointed out that when policies are inexpensive, these operational tasks can quickly consume all generated revenue.

He contends that as vertical SaaS companies increasingly seek growth beyond standard subscription fees, embedded insurance represents “a largely untapped opportunity” to earn incremental revenue from existing platform transactions while adding value for users.

“The challenge is that the insurance and regulatory landscape is incredibly complex, and most SaaS companies don’t have the expertise, industry relationships or understanding of where to begin,” he stated.

Slingshot addresses this hurdle by offering a white-glove service to vertical SaaS companies, guiding them from the initial concept phase to “a fully operational offering.”

Illustrating his point with a hypothetical scenario, he mentioned a program that collects $500,000 in premiums at a 10% margin would yield only $50,000 in profit.

“That’s not a viable program for the way incumbent carriers have set themselves up operationally,” he said.

Slingshot intends to eliminate the spreadsheets, emails, and fragmented systems traditionally used for this administration by deploying software that bridges distributors and insurers directly. The company explains that its AI automates data-heavy responsibilities while maintaining a transparent record of decisions for review by all participating businesses.

The startup charges a 5% technology fee to administer programs through its software. Securing its own insurance carrier would allow the firm to deliver both the underlying technology and financial backing simultaneously, according to Genteman.

A customer helped shape the business

The obstacles encountered by Slingshot’s very first customer helped catalyze the creation of the startup.

Rally had previously helped launch Vertical Insure, which utilizes software platforms to distribute insurance to end-users. Genteman noted that while the company found opportunities to introduce new products, it faced roadblocks finding insurers with modern technology and compatible workflows.

“We can design the products our customers need almost overnight, but the industry is highly regulated, and we need delegated authority just to write and distribute what we’ve built,” said Vertical Insure co-founder and CEO Brock Noland in a statement. “The antiquated approval process on the carrier-side slows everything down.”

Even after securing an insurer willing to back a policy, establishing connections between the two corporate systems frequently generated further delays, Genteman added.

Slingshot was engineered to resolve these exact challenges, with Vertical Insure acting as a design partner to refine the product. Noland is also listed as a Slingshot co-founder.

The opportunity in vertical SaaS

Genteman spots a broader commercial opening among vertical SaaS businesses—firms that build software tailored to specific industries.

As these vertical SaaS companies look for ways to expand beyond baseline subscription revenue, insurance could provide another channel to monetize purchases already occurring on their platforms, Genteman argues. Because they already understand their users and transaction details, these companies are well-positioned to offer tailored coverage.

As an illustration, a babysitting platform could offer backup insurance to help parents pay for alternative childcare if a sitter cancels at the last minute. Similarly, software utilized by pet boarding facilities could provide coverage for unexpected veterinary bills if an animal gets injured during a stay, while equipment rental platforms might let users add checkout protection against accidental damage or theft.

These represent just a few potential applications, according to Genteman. Slingshot aims to assist vertical SaaS companies in transforming such concepts into viable insurance products by providing the necessary software alongside guidance through industry regulations.

“Insurance becomes another product that can be offered naturally within the existing customer experience,” he said.

Justin Kaufenberg, managing director at Rally Ventures, finds this market dynamic familiar. Prior to joining Rally, he ran SportsEngine, where insurance sold via the platform’s software transformed into a major revenue stream.

“That experience gave me firsthand insight into the opportunity for software companies to generate revenue through embedded financial products,” he wrote via email.

Kaufenberg identifies comparable potential across Rally’s entire portfolio, where the majority of companies combine artificial intelligence with financial services. He noted that founders increasingly demand insurance partners capable of helping them deploy coverage options rapidly.

Rally co-founded Slingshot to combine insurance backing, underwriting, reporting, claims processing, and distribution into a single unified business.

“To get the carrier, the reinsurance, the underwriting platform, the data flow engine, the reporting capabilities, the claims handling, the embedded distribution engine, and every other part of the offering from a single vendor is unheard of,” Kaufenberg said.

From insurance executive to founder

Prior to launching Slingshot, Genteman served as the chief actuarial officer at the publicly traded company Palomar Holdings, where he also managed data operations. He joined the firm in 2019, helping construct its data and actuarial infrastructure as the company branched out from earthquake insurance into alternative coverage lines.

That professional experience inspired him to investigate whether modern technology could lower the operational costs associated with insurance programs. Roughly a year ago, he started writing code and developing prototypes in his basement, initiated discussions with Rally near the end of 2025, and officially departed Palomar on July 1 to lead Slingshot full-time.

Related Crunchbase query:

• Insurtech Startup Funding, 2026

Illustration: Dom Guzman

Frequently Asked Questions

What is Slingshot Insurance?
Slingshot Insurance is an AI-native embedded insurance startup that helps businesses, particularly vertical SaaS platforms, offer small, checkout-based insurance policies to their customers.

Who funded Slingshot Insurance?
The startup emerged from stealth with $27 million in seed funding co-led by Rally Ventures and Skyward Group, with participation from veteran industry figures like Jim Hays.

Who founded the company?
Slingshot is led by co-founder and CEO Ethan Genteman, alongside co-founder Brock Noland and venture co-founder Rally Ventures.

What is embedded insurance?
Embedded insurance refers to insurance coverage that is integrated seamlessly into another purchase or consumer transaction, such as booking a flight or registering for a youth sports league.