Dallas life insurance startup Bestow laid off 14% of its workforce on Friday, affecting 41 employees.
The layoffs were in response “to the changing market conditions,” according to Bestow’s co-founder and CEO Melbourne O’Banion.
“We are grateful for their many contributions and sad to see them go,” O’Banion said.
Bestow shared the news on a 1-to-1 basis with each affected employee. The company said it “felt it was the most respectful way to communicate to each team member.” The company is giving the employees severance packages, COBRA health insurance and access to free mental health services and it’s allowing them to keep laptops and other work equipment. Former employees will also be provided with an employment outplacement service to help them secure new positions.
Bestow had just announced plans in February to hire up to 150 more workers in 2022 as the firm was looking to build on strong revenue growth over the past couple of years. Doubling its revenue year-over-year in 2021, the company attributed its growth to trends amplified by the pandemic and its ability to penetrate a younger consumer base than traditional life insurance products.
Shortly after, the firm announced that it had earned a 2022 Great Place to Work Certification, with 98% of employees reporting the firm as a great place to work.
CrunchBase estimates the company has drawn in over $137.5 million in private equity funding over four funding rounds since 2017. In 2021, the company’s $2.3 million acquisition of Centurion Life Insurance Co. gave it license to be its own insurance carrier in almost every state in the US
Bestow joins a couple hundred tech companies that have had layoffs in 2022. Among them are online insurance companion The Zebra, which is based in Austin and laid off about 40 employees, according to CrunchBase. Among the other tech companies are Netflix, PayPal and Robinhood.
“We are heavily investing in business areas that have demonstrated the greatest growth potential and a faster path to profitability, such as our enterprise, partner and solutions consultant,” O’Banion said. “We remain confident in the future of Bestow, our team and leadership and the opportunity to continue to scale and achieve our mission of increasing financial security for everyone.”
Founded in 2016, Bestow creates instant life insurance solutions for businesses of all sizes across any channel. The product is a fully digital life insurance offering that uses artificial intelligence to help customers secure a plan in minutes on their phones with no medical exams needed. Bestow has 247 employees after the layoffs.
“From our experience, great companies and teams rise to the challenge in difficult market conditions, which we are excited to do for our customers and partners.”