Slingshot Exits Stealth With $27M Seed To Fix Checkout Insurance

Slingshot Insurance has raised $27 million in seed funding to build an AI-native platform for embedded insurance — the small policies consumers buy at checkout, such as flight coverage during booking. The Minneapolis-based startup revealed the round exclusively to Crunchbase News as it emerges from stealth.

Rally Ventures and Skyward Group co-led the round. Insurance industry veterans participated, including Jim Hays, who will join Slingshot's board. Rally is also a co-founder of the company, part of a broader approach that has seen the firm co-found roughly eight portfolio companies, launched or still in stealth.

Slingshot is led by first-time founder and CEO Ethan Genteman, formerly chief actuarial officer at publicly traded Palomar Holdings, where he also led data. He joined Palomar in 2019 and helped build its actuarial and data team as the insurer expanded beyond earthquake coverage. He left on July 1 to run Slingshot full time — the same day the six-person company formally began operating.

What does Slingshot actually do?

The startup's software connects businesses that want to offer small policies with the insurers that back them. Its AI processes and shares data between the two sides, aiming to cut the administrative work that makes inexpensive policies costly to offer. For now, Slingshot earns revenue as a technology provider working with outside insurers — but it's pursuing an acquisition that would let it back policies itself.

"We're not a carrier yet, but we are rapidly closing on our carrier," Genteman said in an interview.

Its first customer and design partner is Vertical Insure, which serves more than 750,000 customers at an average premium of $25, according to Slingshot. The first program launches this month. Rally had already helped start Vertical Insure, which struggled to find insurers whose technology and processes could keep up.

"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," Vertical Insure co-founder and CEO Brock Noland said in a statement. "The antiquated approval process on the carrier-side slows everything down." Noland is also a Slingshot co-founder.

Why a $25 policy needs new math

One product in development would let parents buy insurance when signing a child up for youth sports: a parent spending $2,000 on a volleyball league might be offered a $25 policy covering cancellation or injury during the season.

Each policy carries paperwork, insurer coordination and potential claims. At those price points, administration can quickly eat the money a policy brings in. Genteman offered a hypothetical: a program collecting $500,000 in premiums at a 10% margin keeps just $50,000.

"That's not a viable program for the way incumbent carriers have set themselves up operationally," he said.

Slingshot replaces the spreadsheets, emails and disconnected systems currently used to manage that work with software linking distributors and insurers directly. The company says its AI automates data-heavy tasks while keeping a record of decisions that businesses can review and audit. It charges a 5% technology fee to administer programs through its platform.

The vertical SaaS opening

Genteman sees the bigger prize in vertical SaaS companies hunting for revenue beyond subscription fees. He calls embedded insurance "a largely untapped opportunity" to monetize transactions already happening on their platforms.

"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 said. Slingshot positions itself as a white-glove service taking those companies from an insurance idea to "a fully operational offering."

His examples: a babysitting platform covering replacement childcare when a sitter cancels, pet boarding software covering unexpected vet bills, or equipment rental checkout protection against damage or theft. "Insurance becomes another product that can be offered naturally within the existing customer experience," he said.

Justin Kaufenberg, managing director at Rally Ventures, knows the playbook firsthand. Before joining Rally, he ran SportsEngine, where insurance sold through its software became a key revenue source. "That experience gave me firsthand insight into the opportunity for software companies to generate revenue through embedded financial products," he wrote via email.

"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 said. Rally co-founded Slingshot to bundle all of that in one business.

Genteman's path here was hands-on: about a year ago he began coding prototypes in his basement, then started talking with Rally toward the end of 2025. If the carrier acquisition closes, Slingshot would control both the software and the financial backing — a combination incumbents haven't offered at the small-policy end of the market.