March 20, 2024

Empathy closes $47M for AI to help with the practical and emotional bereavement process

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Death, as the famous saying goes, is one of the inevitable certainties of life. But that doesn’t make coping with it any easier — not least because while loved ones are grieving, they must also handle a dizzying number of practical tasks, from organizing funerals through to settling finances for the deceased. A startup called Empathy has built a platform to help navigate this tricky space, and now with some 40 million people using the platform it’s raised $47 million more in funding to grow.

The equity round, a Series B, is being led by new backer Index Ventures with several major insurance companies — MassMutual Ventures, MetLife, New York Life, Securian, and Sumitomo — participating as strategic investors. While the company initially launched with a more direct sales model, these days, it primarily works via a B2B2C approach, providing services via policies from employers or insurers, which together account for 99% of its business.

The funding will be used to continue building out its tools and to focus on a larger mission to ‘redefine bereavement care,’ in the words of CEO Ron Gura, who co-founded the company with Yonatan Bergman.

Today, Empathy’s platform incorporates a mixture of AI and human guides to help people with all of the different aspects of the bereavement process, from counselling services and AI to help write obituaries through to services to help automate the process of shutting down all of the dozens of cloud services that the deceased might have used as well as help with settling more complex financial affairs.

Further services will likely see more AI tools incorporated to guide people through the question of ‘what next’ in the process of organizing things, Gura said.

This round brings the total raised by Empathy to $90 million. Empathy is not disclosing its valuation, but we understand from sources close to the company that it’s now approaching $400 million.

The startup was founded in Israel and continues grow its R&D operations there, but its business focus has to date been the U.S. market, where it primarily sells services via insurance companies and employers. To date, some 5 million employees and 35 million policyholders are using Empathy’s tools, said Gura.

Empathy’s arrival in the market came at a timely moment: it launched in the U.S. in 2021, during the peak of the pandemic when mortality was perhaps on people’s minds more than normal; and, as it turned out, a peak moment in venture funding. That led the company to swiftly announce two rounds in the year of its launch: initially $13 million and then a further $30 million just five months later.

While death rates in the U.S. are now improving after the toughest years of the Covid-19 pandemic, in 2023 they still totalled more than 3 million annually, according to figures from the U.S. Census. What has not gone down are the hours needed — more than 420 on average — to wind down a deceased person’s affairs. Most people don’t know anything about what goes into that effort until they have to come face to face with it themselves (something I can unfortunately say I know from direct experience is very true).

Gura — a serial entrepreneur who had founded a social commerce company that he sold to eBay (The Gifts Project) who then spent years in senior roles at WeWork — said a tragedy in his own family, and facing this very predicament of managing practicalities through his own emotional times, is what got him thinking of Empathy to begin with.

‘I didn’t know anything about estate planning but knew a lot about grief,’ he said.

The rise of more sophisticated AI tooling, has played a role in how Empathy has evolved over the last couple of years. Although there have been a lot of efforts made in the area of considering what role AI can play in empathy (with a little ‘e’) the startup Empathy, Gura said, remains focused on keeping a human team in place for that aspect of its service, focusing tech instead on simply making some of the busy and organizational work easier to handle in faster and more cost-effictive, scalable ways.

‘For Empathy to provide this service as table stakes for all life insurance policy holders, that would not be possible without intelligent technology,’ said Danny Rimer, a partner at Index, in an interview. ‘There are a number of aspects that will be handled by individuals by humans, but a number of tools must be provided [alongside that]… Practical stuff like being able to shut down bank or subscription accounts. AI can provide a lot of that replicable logic. It can also be helpful in writing eulogies.’

Alongside Index and the insurance companies, others in this round included previous backers General Catalyst, Entrée Capital, Latitude (sister fund of existing investor LocalGlobe), and Brewer Lane.

Reference: https://techcrunch.com/2024/03/12/empathy-berevement-death-ai/

Ref: techcrunch

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