Exclusive: Slingshot Raises $27M In Seed Funding To Build An Insurer For Those Small Policies Sold At Checkout

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

The funding round was co-led by Rally Ventures and Skyward Group, with additional contributions from insurance industry veterans such as Jim Hays, who is taking a seat on Slingshot’s board of directors. Rally is also a co-founder of the Minneapolis-based startup, fitting into the firm’s broader venture strategy. To date, Rally has co-founded approximately eight portfolio companies that have either officially launched or remain operating in stealth.

Led by first-time founder and CEO Ethan Genteman, Slingshot specializes in low-cost insurance policies that consumers can purchase alongside other transactions, such as trip-cancellation coverage when booking a flight. This strategy, known as embedded insurance, places policy options directly in front of buyers at the precise moment they might need protection.

The startup’s proprietary software assists businesses in offering these policies by linking them directly with the underlying insurance carriers. By leveraging artificial intelligence to process and transfer data between both parties, Slingshot aims to cut down the administrative expenses that usually make inexpensive insurance products unprofitable to offer.

Vertical Insure serves as Slingshot’s inaugural customer and design partner, currently reaching more than 750,000 users with an average premium cost of $25, as reported by Slingshot. Genteman noted to Crunchbase News that Slingshot’s very first program is scheduled to roll out this month.

At present, Slingshot operates as a technology vendor generating revenue through partnerships with external insurers. However, the six-person company—which formally commenced operations on July 1—is also actively pursuing an acquisition that would enable it to underwrite and back policies independently.

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

Making the math work on a $25 policy

One upcoming product in development would allow parents to purchase coverage when registering a child for youth sports leagues, Genteman explained. For instance, a parent spending $2,000 on a volleyball league might be presented with a $25 add-on policy covering trip cancellation or seasonal injuries.

Every policy requires paperwork, insurer coordination, and the potential handling of claims. However, when policies are priced so low, managing those tasks can easily erase any profit margins, Genteman pointed out.

He believes that as vertical SaaS companies look for expansion avenues beyond traditional subscription charges, embedded insurance represents “a largely untapped opportunity” to secure extra revenue from transactions already occurring on their systems while adding genuine value for end 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.

To overcome this, Slingshot offers a white-glove service tailored to vertical SaaS providers, guiding them from an initial insurance concept to “a fully operational offering.”

Illustrating his point with a hypothetical scenario, he noted that a program bringing in $500,000 in premiums with 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’s objective is to replace the traditional mix of spreadsheets, emails, and isolated systems with software that connects policy distributors and insurers directly. The company explains that its AI automates data-intensive duties while maintaining a transparent audit trail of decisions for all participating businesses to review.

The platform charges a 5% technology fee to manage programs through its system. Completing the acquisition of an insurer would allow Slingshot to supply both the technology infrastructure and the financial backing, according to Genteman.

A customer helped shape the business

The operational hurdles faced by Slingshot’s first customer played a pivotal role in the creation of the startup.

Rally had previously helped launch Vertical Insure, which collaborates with software platforms to distribute insurance to end users. According to Genteman, that enterprise spotted numerous opportunities to introduce additional products but struggled to locate insurers whose technology and workflows could keep pace.

“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 new product, integrating the respective technology systems often introduced further delays, Genteman noted.

Slingshot was engineered to resolve these exact bottlenecks, with Vertical Insure contributing to the product’s development as a design partner. Noland is also listed as a co-founder of Slingshot.

The opportunity in vertical SaaS

Genteman identifies a much broader opening within the vertical SaaS sector—companies that market software tailored to specific industries.

As vertical SaaS businesses seek alternative ways to monetize beyond software subscriptions, insurance provides a natural channel to generate income from transactions their users are already completing, Genteman argues. Because these platforms already understand their customer base and purchasing habits, they are uniquely positioned to suggest relevant coverage.

For example, a babysitting app could offer protection enabling parents to hire emergency backup childcare if a sitter cancels at the last minute. Similarly, software utilized by pet-boarding facilities might provide protection for unexpected veterinary expenses if an animal gets hurt during a stay, while equipment rental platforms could let users buy accidental damage or theft protection at checkout.

These represent just a few potential use cases, Genteman remarked. Slingshot aims to assist vertical SaaS companies in transforming such concepts into viable, market-ready insurance products, offering both the underlying software and guidance through complex 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 landscape familiar. Prior to joining Rally, he managed SportsEngine, where insurance products sold via the company’s software evolved into a major revenue generator.

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

Kaufenberg anticipates comparable potential across Rally’s portfolio, noting that most of their firms combine AI products with financial services. Founders, he observed, increasingly demand insurance partners that can facilitate rapid product rollouts.

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

“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 stated.

From insurance executive to founder

Before launching Slingshot, Genteman served as chief actuarial officer at the publicly traded firm Palomar Holdings, where he also oversaw data operations. He joined the company in 2019 and helped scale its actuarial and data divisions as the organization expanded its footprint beyond earthquake insurance into other lines of coverage.

That professional experience inspired him to investigate whether modern technology could lower the operational overhead of running insurance programs. Roughly a year ago, he started programming and developing prototypes from his basement. He initiated discussions with Rally near the end of 2025 and officially stepped down from Palomar on July 1 to lead Slingshot full-time.

Related Crunchbase query:

• Insurtech Startup Funding, 2026

Illustration: Dom Guzman

?Frequently Asked Questions

01What is Slingshot Insurance?

Slingshot Insurance is an AI-native embedded insurance startup that helps businesses—particularly vertical SaaS companies—offer small insurance policies seamlessly at checkout.

02How does Slingshot generate revenue?

Currently, Slingshot operates as a technology provider, charging a 5% technology fee to administer programs through its platform with outside insurers. It is also pursuing an acquisition of an insurance carrier to back policies directly.

03Who co-led Slingshot’s seed funding round?

The $27 million seed round was co-led by Rally Ventures and Skyward Group.

04Who is the founder and CEO of Slingshot?

Ethan Genteman, former chief actuarial officer at Palomar Holdings, serves as the founder and CEO of Slingshot.

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