Comcast Ventures is an early investor and believer in their ability to protect online purchases
By: Sheena Jindal, Principal, Comcast Ventures
Imagine your flight gets delayed. Rather than jockeying for position near an electrical outlet to charge your phone, you automatically receive a QR code for access to the airport lounge. You grab a snack, plug in your phone, and rest comfortably until takeoff.
That’s because you purchased insurance along with your ticket, stating that if your flight was delayed, you’d get free access to the lounge. It’s a product of parametric insurance embedded at the purchase stage that removes that confusion with a simple formula: if X happens, you get Y. And it isn’t a fantasy; it’s changing how consumers protect their purchases.
Leading the way is Pattern, a startup that will add insurance options to a variety of online purchases — from travel to e-commerce. I am excited that Comcast Ventures has been a supporter since the company’s inception in 2020, during which we led its seed round. We believe that Pattern will make insurance more ubiquitous, relatable, understandable, and intuitive.
Pattern just announced a merger with Setoo, a company helping online businesses build and sell personalized coverage in travel using embedded insurance. The combined company (to be called Pattern) is well positioned to power the future of protecting consumer purchases. This aligns with Comcast Ventures’ focus on supporting fintech companies that provide businesses and consumers with better, more personalized products and services. To help fuel its launch, we are following our seed investment with a new investment in 2021.
The market for the combined company (called Pattern) is huge. In the United States alone, there are projected to be 279 million online buyers by 2024 (up from 256 million in 2020), with 82% of the American population purchasing goods online in 2024 (up from 77% in 2020). Globally, e-commerce sales are expected to reach $5.4 trillion by 2022, up from $4.3 trillion in 2020.
From our very first meeting with Founder and CEO Meitav Harpaz in 2020, we were struck by his passion, thoughtfulness, hustle, and creativity. His mission-driven vision has helped him recruit a great team and find product market fit. When he serendipitously connected with Setoo’s equally impressive co-founders, Noam Shapira and Eyal Gluska, they realized the sum of the parts would be greater than the individual companies.
Meitav’s also has a strong vision for the future of insurance. Anytime you make a purchase, you are exposed to some risk. Online, cyber attacks are up 300%. Offline, Americans lost $5.4 billion due to package theft in 2020. Insurance can provide necessary protection, yet its complex purchasing funnel and cumbersome claims process make it difficult to navigate. Parametric insurance solves for this by making the payout tangible. For example: If the ecommerce platform your small business uses is hacked and customers can’t check out, you may lose $1,000 in sales. Pattern will be able to proactively cover your loss. If the package containing your new handbag is stolen from your porch, Pattern will initiate a replacement. This level of proactive claims is unheard of in insurance, making for an easier customer experience, and offering both sides of the transaction full transparency on what is covered and what it costs.
Pattern’s impressive technology allows them to assess risk in real time, and dynamically change prices based upon evolving inputs (e.g., changing weather patterns may increase likelihood of a delay, thus increasing the price of that policy), assuring that the consumer is getting a fair price correlated with the genuine risk. Pattern’s rates change in real time, while most traditional insurance companies update their rate cards annually at best. With Pattern, consumers receive a personalized experience, peace of mind and a fixed payout if a claim happens. Meanwhile the business (the airline, ecommerce retailer, or handbag retailer) can accurately underwrite the cost of the claim — say $100 expense for lounge access against the probability of a two-hour flight delay — and decide how much margin and buffer they’d like to incorporate. As such, the pricing is dynamic and lower, incentivizing consumers to protect their purchases. If a claim does not happen, and their flight is on time, they paid for peace of mind at a low cost.
The purchasing of insurance is typically decoupled from the primary product or service bought. With Pattern, every purchase could have an insurance option at checkout. That’s a powerful idea that could change online shopping. It’s no wonder why embedded insurance and parametric insurance are two themes we are incredibly bullish on.
At Comcast Ventures, our goal is to support founders who build meaningful businesses – and we believe in Pattern’s mission to deliver a fantastic product and relentlessly support and protect consumers in a unique way. We are excited to see what this team and newly formed venture will achieve.