Package insurer PorchPals plans $10M-$30M raise

Richard Collings
Dec 12, 2022

PorchPals, a Los Angeles-based provider of porch package piracy insurance, plans to raise $10 million to $30 million to launch its service nationally, co-founder James Moore tells Axios exclusively.

It is in exchange for a significant minority stake, but he declined to comment further.
Why it matters: The startup, which launched in California in late November, says it's the first to offer subscription package theft insurance in the U.S.

Details: The raise will fund PorchPals' national launch, which Moore says will begin in January.

The round will be invested in the platform, acquiring customers, and developing new insurance products such as electronic product warranty, Moore says.
How it works: PorchPals helps reduce pain points for consumers when packages get stolen and the corresponding claim process, which can end up involving multiple parties, including the seller of the product, the platform on which the product is purchased and the shipper.

The DTC subscription insurance program can either be purchased for $120 a year or $16 a month.
It has technology and methods of tracking a package to understand what happens to it along its journey when it goes missing, Moore says.
The intrigue: Via B2B, PorchPals can also see its product being offered by large insurers as an add-on to their property or renter's insurance offerings.

By the numbers: In terms of market opportunity, Moore points out there are 130 million residential porches in the U.S.

He projects the company could realistically generate $10 million in revenue in its first year and margins of 50% to 60%, though there's nuance with risk.
Flashback: The company has raised $3 million to date, via an internal round of $1.5 million and then a $1.5 million SAFE round.

PorchPals also recently raised tens of millions from reinsurer New Line Group, the London-based syndicate of Fairfax Holdings, solely for risk coverage and premium coverage, enabling PorchPals to issue policies, Moore says, though he declined to comment on the specific amount.
The money raised from New Line Group tied to risk coverage and premium coverage is separate from the equity rounds.
What they're saying: "Retailers and customers are all feeling stress from crime, whether it be in-store shoplifting or package theft. If PorchPals can give the customer peace of mind at the point of purchase, and the feeling that they are covered, we have done our job," PorchPals investor John Elmer Nordstrom tells Axios.

The bottom line: "While we can’t stop all thefts, we can at least help the consumer recover some or all of their loss," Moore says.

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