On-demand insurance startup sues rival firm for imitating business | Insurance Business
Insurtechstartup Sure Inc. is suing Boost Insurance, accusing the latter of alleged “improper and unlawful misappropriation of Sure’s confidential trade secrets.” Sure’s lawsuit was filed May 06, 2021 in New York Supreme Court. It names Boost Insurance Agency and Boost Insurance USA as the defendants.
Based in Santa Monica, CA, Sure was founded by entrepreneur Wayne Slavin in 2014. Turbulence during a plane flight inspired Slavin to think up a platform where one can purchase insurance on-the-spot, such as buying life insurance before boarding an airplane. From offering this type of “episodic” insurance via a proprietary mobile app, Sure later began offering its application programming interfaces (APIs) to power the digital platforms of insurance carriers.
In 2015, Sure raised seed funding, and later closed a Series A round in 2017. That funding round was led by IA Capital Group. Following that round, IA Capital partner Alex Maffeo joined Sure's board.
According to Sure’s complaint, Maffeo told Slavin about an internal IA project called “Boost” that would essentially act as a service provider for startups like Sure – an offer Slavin declined, as he reasoned that Sure already had insurance partners. Slavin also viewed Boost as helping Sure’s competitors. This conversation occurred weeks after the funding round closed, and months after IA had begun due diligence.
During a board meeting on March 02, 2017 – a meeting where Maffeo was present – Slavin discussed the company’s plans to transition into more of an API provider for carriers, the lawsuit said. Plans on how this transition was going to happen, and Sure’s customer acquisition strategy were also discussed during the meetings.
Also on March 02, 2017, Maffeo allegedly asked Slavin for “more info on the API." He continued to ask for “detailed information” on Sure’s software systems and infrastructure, claiming that the data would help Boost understand how insurtechs operate. He also later asked in July about "insight on the technology side."
While Slavin did not share API information with Maffeo, the complaint said that Slavin sent Maffeo an analytics report. The Sure founder also warned Maffeo to “keep it confidential”.
Boost Insurance later launched as an independent venture capital-backed startup separate from IA Capital, with Maffeo serving as CEO. It closed its first successful funding in September 05, 2017. While Maffeo was replaced by another IA Capital representative on Sure’s board, Maffeo remained an “advisory partner” and continued to attend Sure meetings until February 2018, the complaint said.
It was by mid-2019 that Boost had become a full-fledged competitor when it stopped being a service provider to insurtechs, Sure alleged in its suit. Boost was pivoting from its original plan to provide capital and support to insurtechs into a business that helps non-insurance companies sell insurance to consumers through their websites, and was hiring insurance staff for its new business direction. Information on Boost’s website also advertised an “API-Driven Insurance Platform” much like Sure’s, the complaint continued.
“It was now clear to Sure that Maffeo had stolen Sure’s ideas, technology, and trade secrets, all of which he obtained while he was a member of Sure’s Board, and misappropriated that information to turn Boost into a carbon copy of Sure,” the insurtech’s lawsuit said.
Sure also alleged that Matthew Perlman, a principal at IA and Maffeo’s replacement on Sure’s board, would report any confidential information Slavin had discussed during board meetings to Maffeo.
In a statement to Axios, Maffeo said that he was initially unaware of the lawsuit. When it was brought to his attention, he said that he “needed more time to review with counsel” before he could make any more comments, but did assert that Sure’s claims were “categorically untrue."