Beluga Spotlight: Zachary Townsend, CEO of Meanwhile Insurance

By  Will McKinnon March 5, 2024

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About Zac

Zac Townsend is a leader and innovator at the intersection of tech, finance, and policy. Zac is CEO and Co-Founder of Meanwhile, the first life insurance provider denominated and operating entirely in a digital asset, BTC.

Zac was the Head of Product and Co-Founder of Standard Treasury, which participated in the summer 2013 batch of Y Combinator. As the head of product there, he conceived and built one of the earliest "banking-as-a-service" companies and ultimately sold it to a top-20 bank.

Zac has also served in a range of senior government tech-policy roles including his time as a Senior Technology Advisor to Newark, NJ Mayor Cory Booker and CTO for the City of Newark. Additionally, he served as the inaugural Chief Data Officer for the State of California. Most recently, Zac was an Associate Partner and a leader in the financial services practice at McKinsey & Company where he focused on interim product and business unit leadership roles at banks and insurance companies.

After getting his undergraduate degree in Applied Mathematics and Public Policy from Brown University, Zac earned his Master of Public Administration (MPA) from NYU's Wagner School of Public Service, where he focused on public financial and statistical methods.

Interview

1. You are Ivy league educated, worked for McKinsey and sold a fintech company. What made you want to get into crypto three years ago?

Much of my professional career has been spent addressing the issue of financial inclusion, which is a passion that was born out of growing up in a working class family in New Jersey.

After I graduated from Brown, I moved to NYC and joined a consulting firm that took a data-driven approach to evaluate performance in the public sector. Through that job I met Cory Booker while he was the Mayor of Newark, NJ. He recruited me over to be Head of Innovation for the city and in this role I focused on, among other things, financial inclusion. This was the beginning of my professional focus on the issue.

When Cory decided to run for Senate I moved to the Bay Area, went through Y-Combinator, started a company that built low level infrastructure for banks via APIs to help democratize access to bank accounts, and ultimately sold that to SVB in 2015.

In the years that followed I spent time back in the public sector as the inaugural Chief Data Officer for the state of California then in the private sector with McKinsey as a leader in their North American fintech practice.

In late 2021 I sat down with longtime friend and Meanwhile cofounder, Max Gasner, to brainstorm some ideas for a company we could start together. Max and I share the belief that Bitcoin, and crypto more broadly, is a way for more people to participate in a financial system - and life insurance is a core product for any financial system. So, through our passion for financial inclusion, we arrived at founding a crypto life insurance company in January 2022.

2. How does Bitcoin life insurance work? Is it just Bitcoin?

We run what probably looks like the most basic, boring life insurance company in the world - it's just instead of being in dollars or euros or francs, everything is in Bitcoin. We sell Whole Life policies by which our policyholders pay their premiums in BTC, they can access the liquidity of their policy by taking out a BTC policy loan, and when they die their beneficiaries receive the death benefit in BTC. Everything that we do in between is in BTC (solvency calculations, asset management, etc).

Our company is exclusively Bitcoin today. As a life insurance company, we have to plan and build for decades, and when we asked ourselves which digital asset we have the most conviction will be a dominant player in the space in 50 or 100 years, the answer was Bitcoin.

3. Why is your company based in Bermuda?

Bermuda is a world leader for insurance regulation and is becoming more and more innovative with their crypto regulation. The combination of its reputation as a world class insurance regulator and growing crypto practice (Coinbase and Cash App now have their offshore operations in Bermuda) made it the perfect fit.

4. Your company has raised $19M from some of the top VC's in crypto and silicon valley as well many well known Silicon Valley executives. Sam Altman (Co-founder of OpenAI) led the round. How did this round happen during crypto winter?

We have now raised just over $20M of seed capital to date, and our cap table includes solo capitalists and institutions ranging from Sam and Lachy Groom to Northwestern Mutual and Google, among others. We believe that many of the world's most revolutionary companies were built during bear markets, and our story resonated with these investors. Of developed economies, something like 2-3% of GDP is life insurance premiums - so if you believe, like we do, that there will be a robust BTC economy, the market opportunity is substantial.

5. Your company is US focused right now. What are your international plans?

Our 2024 roadmap includes operationalizing non-US companies whose tax codes allow for advantages afforded to life insurance. We are spending a lot of time on calls with individuals and counsel in several countries to deeply understand their markets.

6. Who is your ideal target customer? What is the advantage for a crypto person to use your life insurance rather than a traditional life insurance policy?

We generally have two customer profiles: 1) People who are rich because of crypto and 2) People who are rich, and own some crypto. Our Whole Life policy enjoys all of the same tax advantages of traditional whole life, but because the underlying currency has upside potential those advantages can be dramatically amplified.

7. What type of licenses do you need? Has it been easy to work with regulators?

We are licensed as Class ILT in the Bermuda Monetary Authority. I think any truly innovative venture unearths new challenges from a regulatory perspective, but we are grateful that we get to work with the BMA to pioneer something truly revolutionary.

8. What about the traditional insurance companies? Have they been receptive to your company?

We do have some traditional life insurance companies on our cap table, but I think they view us as doing something very different from what is in their purview from an operations perspective. Not only are there steep regulatory hurdles, but to do what we're doing on legacy tech infrastructure would be incredibly difficult and the capital charges for a traditional life insurance company to provide digital asset products would be very expensive.

9. What are your company plans for the next couple years?

We plan to become the world's largest life insurance company and have a goal to service one billion customers. We operate in the US today, but looking at the world's economies we believe it makes a lot of sense for an individual in one of the 57 countries worldwide that has experienced inflation above 10% in the last year to buy life insurance in Bitcoin.

There is also a near limitless list of product offerings that a life insurance company can provide for its customers - whole life, term life, group life, key man, and even annuities. We have big plans to expand our offerings.

10. How does one sign up for your insurance product?

We have a waitlist on our website (meanwhile.bm) that people can join. A member of our team speaks with every single person that signs up on our waitlist to ensure that every question gets answered before people apply for a policy.

11. Curious, what crypto do you personally own or that you have a strong passion for?

My crypto journey really began back in 2015 when I sold my first company to SVB. Among the bidders for our company was Coinbase, and Brian Armstrong actually sent me my first bitcoin to demonstrate their platform. From there I, like many others, went down the rabbit hole to learn about the broader crypto ecosystem, but ultimately came back to BTC as the best asset.