A rock climbing term became the unlikely inspiration for a Philadelphia startup's recent rebrand thanks to the word capturing the company's mission.
Formerly known as Wolf Financial, Belay rebranded at the end of 2022 and isas now readying to launch its direct-to-consumer product to the market.
The idea for the name came about when members of the company's executive team gathered to discuss possible options. During one such meeting, an outdoor magazine sat on a coffee table. The team's chief technology officer, unsure why he was in a marketing meeting, picked up the magazine, pointed to a rock climber and said, "I'd call [the company] Belay."
His suggestion might have been in jest, but it captured the startup's ethos, said founder Michael Warshowsky, a 22-year-old who started as a student at Drexel University before shifting his focus to the company, which is now backed by some $5 million.
Belaying refers to a climbing safety technique involving ropes secured to a rock wall face and a climbers' harness, ensuring that if a climber slips, they don't fall too far. Appropriately, Belay has a similar concept, albeit one that doesn't involve mountain or rock climbing.
Rather, the startup sells insurance policies on stock investments and is launching its direct-to-consumer platform this week. The platform will launch to an undisclosed number of people on a waitlist before opening to the general public in the first week of February.
Until now, Belay's insurance policies were solely accessible through integrations with existing brokerage platforms like TraderPal. The company says it is the first to offer such an insurance policy.
It's a pivot from where the company started. Wolf Financial initially launched in 2020 as a stock brokerage platform with a social element. The idea of offering insurance started to materialize and rather than try to compete in a crowded brokerage field, Warshowsky and his team decided to lean into the insurance idea in 2022. Rather than a brokerage platform, Belay has refashioned itself as an insurer for stock traders.
To insure stocks, the company charges a premium that varies based on the stock being insured — the same way car insurance can vary based on the demographic of the driver. When an investor goes to sell the stock, if it's share price has dropped below its purchase price, Belay will reimburse the losses. For example, if an investor has 20 shares of a stock insured at $10 per share, then sells the stock at $7 per share, they would be reimbursed at $3 per share for their 20 shares, or $60.
The company's research has found that offering policy premiums below 4% of the price of the stock makes for a 60% to 75% likelihood an investor will buy a policy, according to Warshowsky. He said the goal is to have policy premiums be "as cheap as possible" and that with more scale, policy premiums will go down.
"We're really trying to build something that will have lasting impacts on a lot of people, on the average person," Warshowsky said. "The ability for people to have comfort, safety, protection, the peace of mind without complexity for a reasonable price and really try and shift people's preset perspectives on the concept of financial freedom."
The creation of the direct-to-consumer platform came in response to growing demand, Warshowsky said.
Warshowsky has lofty ambitions for making Belay a "ubiquitous" force in stock trading and "part of the consumer psychology." In time, his goal is for consumers to buy an insurance policy with every stock purchase. In order to get to that point, Belay will have to be integrated into as many brokerages as possible. That's a priority in 2024, and Warshowsky hopes that "building a broad base" from the direct-to-consumer product will help secure partnerships with those larger brokerages.
Belay, which has a team of 12 technology, investment and insurance industry veterans and is based at Two Commerce Square, is currently approved to operate in 37 states and has raised some $5 million in pre-seed and seed funding.
Warshowsky, who declined to disclose company revenue, said Belay doesn't "need to go out and raise as of today," but that in the future additional funding would serve to "bring in some jet fuel to pour into the engine."
