It’s been a rough few months for would-be insurance start-ups. No sooner has
Zenefits made headlines for its spectacular failure to get the correct licenses for its staff, than another would be unicorn has taken what looks to be a terminal nose dive.
And there still seems to be no shortage of funding for these upstarts.
According to the testimony of three former employers, insurance startup BenefitVault laid off most of its staff.
The startup received $3.8 million in venture capital as of June 2015.
BenefitVault, founded in 2013, billed itself as the “PayPal of the insurance business” by offering its services as an alternative to payroll deduction programs businesses might have when handling employee insurance bills.
Purportedly, BenefitVault had hired 30 more employees before the downsizing.
The company and its executives did not respond for comment,
Technical.ly reported.
While the company’s reason for the cuts remains unclear, one former employee hinted that it could be due to “misdirection” in the way the company was being administered.
“I think this is a case other startups can review to see what went wrong and learn from these mistakes,” the former employee told
Technical.ly. “And the lesson is: don’t sell something you’re not ready to sell. In this case, the technology was not up to being sold on the level it was being sold.”
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