(Bloomberg) — On March 3, 2020, Sondre Rasch threw a party to launch his startup’s new health insurance product for the relatively niche global community of remote workers.
Rasch, 34, told the crowd his new product was ahead of its time, predicting that remote work would one day move from the fringes of the corporate world to become mainstream. He didn’t anticipate that Covid-19, which was already silently spreading through the Bay Area, would make that vision a reality in just 10 days.
It felt “absolutely bizarre,” said Rasch, co-founder and chief executive officer of San Francisco-based SafetyWing, to be talking about a vision of the future and have that become reality almost overnight. By the next weekend, “everyone is literally working remotely,” he said. Some of his staff members, who are dispersed all over the world, struggled to fly home after the event as borders were beginning to close.
But for SafetyWing, the timing couldn’t have been better. The startup, which was founded in 2017 to offer subscription-based travel and medical insurance to freelancers working abroad, has seen the kind of explosive growth trajectory every entrepreneur wishes for. “If this was a movie, it would’ve been an unbelievable plot,” Rasch said in an interview.
The business is still small but is growing quickly. Active subscribers have quadrupled in the past year to about 14,300 as of June 1. Privately valued at about $40 million, according to PithchBook, SafetyWing raised $12.9 million in February.
“They got the tailwind that every founder dreams of,” said board member Carl Fritjofsson, a partner at Creandum, a Stockholm-based venture capital firm that’s one of SafetyWing’s biggest investors. “They were at the right place at the right time and with the right product,” he said. “There are very few organizations who are positioned in the market to really serve this massive remote work trend now sweeping across the world.”SafetyWing has faced little competition in the field because the heavily regulated insurance industry is incredibly complex and can take years to navigate. Every country has different rules and regulations related to employee benefits. “Insurance is complicated; on a scale of one to 10, it’s a 10,” said Leslie Slay, a senior vice president at insurance broker Woodruff Sawyer who has spent the past 25 years working on employee benefits. Even SafetyWing acknowledges the challenges of working in the industry. The company operates across more than 180 countries and new rules or regulations “can cause our product to become unavailable if we aren’t paying attention and aren’t quick to respond,” Rasch said.But more employers may now be forced to address the issue in this new era of increased flexibility. At least 70% of white-collar employees in the U.S. were still working remotely at least some of the time as of April, according to a Gallup poll released in May. This trend is likely to become the norm as companies lean in to the benefits of a remote workforce, including widening the pool of potential talent and reducing the costs associated with physical office space. SafetyWing’s current clients are mainly startups or small businesses with remote and international teams. About half of the companies that have booked calls with SafetyWing in the past three months are based in the U.S. and almost 20% are in the technology sector. SafetyWing is in the implementation phase with the search engine DuckDuckGo and the cryptocurrency group Ethereum Foundation.The startup was conceived as a way for businesses to maintain equitable benefits across the workforce no matter where an employee is based. Rasch came up with the idea in 2017, when he was running a platform for freelancers. He complained to his friends Sarah Sandnes and Hans Kjellby about how he couldn’t provide benefits like borderless health insurance for remote workers on his site because “no one offered it.” In the end, “we concluded we have to build it ourselves,” Rasch said.
SafetyWing now offers a range of subscription-based coverage plans and is aiming to include a telehealth option in the future and eventually pension programs. The Nomad plan provides travel and incidental medical insurance while workers are abroad and protection during short trips back home. Remote health, the product the company launched in March last year, is more comprehensive medical insurance for teams and entrepreneurs living in one country and working for a company in another. In the past year, as more employees have embraced the remote work movement, Rasch says this product has seen revenue increase to $3 million in August from $50,000 in its first month.
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