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

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

The funding round was co-led by Rally Ventures and Skyward Group, with contributions from insurance sector veterans such as Jim Hays, who is taking a seat on Slingshot’s board. Minneapolis-based Rally also acted as a co-founder of the startup, consistent with its wider business strategy. To date, Rally has co-founded approximately eight portfolio companies that either have officially launched or remain in stealth mode.

Led by first-time founder and CEO Ethan Genteman, Slingshot concentrates on low-cost insurance policies that consumers purchase alongside other transactions, such as flight booking coverage. Known as embedded insurance, this approach places coverage directly in front of buyers at the exact moment they might require it.

The startup’s software facilitates these offerings by connecting businesses with the insurers underwriting the policies. It utilizes artificial intelligence to process and transfer data between both parties, cutting down the administrative overhead that typically makes inexpensive policies cost-prohibitive to provide.

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

At present, Slingshot generates revenue as a technology vendor collaborating with external insurers. However, the six-person company, which formally commenced operations on July 1, is also pursuing an acquisition that would enable it to underwrite 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 product currently in development at Slingshot would allow parents to purchase insurance when registering a child for youth sports, Genteman explained. For instance, a parent paying $2,000 for a volleyball league might be presented with a $25 policy that covers season cancellations or injuries.

Every policy entails paperwork, coordination with an insurer, and potential future claims. Yet when policies are priced so low, administrative management can quickly consume all the revenue they generate, Genteman pointed out.

He contends that as vertical SaaS companies increasingly look beyond conventional subscription fees to drive growth, embedded insurance represents “a largely untapped opportunity” to secure incremental revenue from transactions already taking place on their platforms 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 noted.

Slingshot seeks to address this hurdle by offering white-glove service to these vertical SaaS companies, guiding them from an initial insurance product concept all the way to “a fully operational offering.”

He provided a hypothetical scenario: A program collecting $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 remarked.

Slingshot’s objective is to substitute spreadsheets, emails, and fragmented systems with software that directly connects policy distributors and insurance providers. The enterprise asserts that its AI automates data-intensive tasks while maintaining an audit trail of decisions for all participating businesses to review.

The company levies a 5% technology fee for administering programs via its platform. Acquiring an insurance carrier would permit Slingshot to supply both the technological framework and the financial backing, per Genteman.

A customer helped shape the business

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

Rally had previously helped establish Vertical Insure, which leverages software platforms to distribute insurance to its users. As Genteman noted, that venture encountered opportunities to introduce additional products but struggled to find insurers whose technology and processes 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 underwrite a product, integrating the technical systems of both companies often caused further delays, Genteman added.

Slingshot was engineered to resolve these exact issues, with Vertical Insure acting as a design partner to refine its product. Noland also serves as a co-founder of Slingshot.

The opportunity in vertical SaaS

Genteman identifies a broader commercial opening among vertical SaaS companies—enterprises that design software tailored to specific industries.

As vertical SaaS businesses seek avenues to expand beyond standard subscription fees, insurance can offer another mechanism to monetize transactions their customers are already completing on their platforms, Genteman argues. Because these platforms already understand their users and transaction details, they are uniquely positioned to offer relevant coverage.

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

These illustrate the types of products that could be developed, Genteman said. Slingshot aims to assist vertical SaaS companies in turning such ideas into market-ready insurance products, delivering both the software infrastructure and navigation support for the complex insurance and regulatory environment.

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

Justin Kaufenberg, managing director at Rally Ventures, finds this opportunity familiar. Before joining Rally, he managed SportsEngine, where insurance sold through software became a core revenue driver.

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

Kaufenberg perceives similar potential across Rally’s portfolio, where the majority of companies integrate AI products with financial services. He observed that founders increasingly demand insurance partners capable of helping them roll out coverage swiftly.

Rally co-founded Slingshot to merge insurance backing, underwriting, reporting, claims handling, 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 noted.

From insurance executive to founder

Prior to founding Slingshot, Genteman served as chief actuarial officer at the publicly traded firm Palomar Holdings, where he also managed data operations. He joined the company in 2019 and helped establish its actuarial and data division as Palomar expanded beyond earthquake insurance into alternative coverage categories.

That experience inspired him to investigate whether modern technology could lower the costs associated with running insurance programs. Roughly a year ago, he started coding and building prototypes in his basement. He initiated discussions with Rally near the end of 2025 and stepped down from Palomar on July 1 to lead Slingshot.

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• Insurtech Startup Funding, 2026

Frequently Asked Questions

What is Slingshot Insurance?

Slingshot is an AI-native embedded insurance startup that emerges from stealth with $27 million in seed funding to help vertical SaaS companies offer small, checkout-based insurance policies.

Who led Slingshot’s seed funding round?

The $27 million seed round was co-led by Rally Ventures and Skyward Group, with participation from insurance industry veterans like Jim Hays.

Who is Slingshot’s first customer and design partner?

Vertical Insure is Slingshot’s first customer and design partner, serving over 750,000 customers with an average premium of $25.

How does Slingshot’s technology work?

The startup uses AI to process and share data between businesses offering policies and the insurers backing them, aiming to reduce administrative overhead and streamline the approval and distribution process.

Who is the founder and CEO of Slingshot?

Slingshot is led by first-time founder and CEO Ethan Genteman, the former chief actuarial officer at Palomar Holdings.

Illustration: Dom Guzman