Introducing Equal Parts, the next-gen insurance agency
Leveraging AI to scale insurance distribution
For much of the last decade, I’ve been obsessed with finding ways to enable digital transformation for insurance brokerages. We’ve seen tremendous success in doing this with larger agencies via companies like RiskMatch (acquired by Vertafore) and Threeflow, but transformation of the long-tail of the industry (where the vast majority of the industry lies) has been elusive.
Over the last few years, the industry has seen an incredible amount of consolidation. In the last 18 months alone, each of the largest three US brokers completed a $5B+ brokerage acquisition to add breadth and scale to their operations. Over the past decade, sponsor-backed rollups and aggregators have proliferated, driving tens of billions in agency M&A. Simply put, the playbook works and much of our research suggests that inorganic growth is both cheaper and more persistent than organic growth.
Unfortunately, most of the agency transactions and liquidity have been focused on larger assets, despite there being 40,000+ independent insurance agencies in the US and the median size of these agencies being ~2 employees. Not only do these agencies lack pathways to liquidity, but they also lack the resources (in terms of both capital and expertise) to optimize investments in their operations with technology. The result has been clear: the big keep on getting bigger, leaving the small behind.
We think it’s time to change that and wrote about the potential for an insurance agency platform in a deep-dive we published on the topic last summer. Since then, we’ve seen the proliferation of early-stage broker copilots and vertical AI solutions that we believe further embolden the business case for this opportunity by enabling agencies to vastly improve their operational profile, transact more efficiently, and become more strategic with their data. All these advancements enable agents to do what they love doing most - spending time with their customers and prospects.
Our biggest concern in approaching this category was finding a founder strong enough to “climb the mountain” - someone who could manage thousands of people, build/implement ground-breaking technology, and demonstrate true empathy for the real people behind these relationship-centric businesses. We’ve been fortunate enough to know several agency owners who have sold their businesses for amazing exits (ranging from several hundred million dollars to >$10 billion) and we believe strongly that these are skills necessary to (finally) bring digital transformation to the long-tail of this industry.
With that, we’re proud to announce our investment in Equal Parts, led by Mike Witte. Mike was previously the co-founder at Workrise (fka RigUp), the leading labor and talent solutions platform for the energy industry, initially serving as its President before ultimately becoming CEO. I’ve had the pleasure of knowing Mike for over a decade, initially meeting during business school and then ultimately angel investing in the company. Under his stewardship, Workrise grew to a profitable company with 9 figures of revenue that was last valued at $2.9 billion. Mike stepped away from Workrise last year and immediately was itching to start something new where he could empower Main Street SMBs with technology (Workrise’s slogan was “We power the people who power the world”). Mike's background speaks for itself, but we’ve also been wowed by his speed, urgency, and ability to get things done. Above all else, Mike isn’t afraid to get his hands dirty and spent several months meeting with agency owners across the country to learn more about their challenges and opportunities as he workshopped his plans for Equal Parts. Along the way, Mike built a large pipeline of amazing agency partners, while building buy-in from top leaders from across the industry. Ultimately, Mike’s vision extends well beyond what we initially thought possible, with the ambition to empower the entire long-tail of the market and unite these agencies together into the single largest source of premium in the agency market. Accomplishing that is no small feat, but we’ve always said that this opportunity required a founder who could climb mountains and we very much believe Mike is that person.
Mike launched Equal Parts in January, seeded with a first check from Equal Ventures. For the record, we did not have any say in naming the company (although we like it!), but Mike felt that the name resonated well with agency owners given the focus on 1) partnership with agency owners (rather than traditional PE approaches) and 2) balancing equal parts AI innovation with the people components of the industry. Since then, Mike has recruited a stellar team, closed his first acquisition (with several others under LOI), and has built out amazing technology infrastructure to scale the operational aspects of serving a rapidly growing premium platform.
Equal Parts’ website boldly states that they’re on a mission to become a top-5 insurance distributor within the next decade. With the progress we’ve seen and the team at the helm, that audacious goal seems achievable.
Congratulations to Mike and the team at Equal Parts!