When Derek Szeto launched Walnut Insurance in 2020, he was solving a real, overlooked problem: most people only think about insurance when they have to, and even then, the experience is anything but delightful.

“Insurance is behind. Not just in tech, but in how it’s offered to people. No one wakes up excited to buy it.”

So, he and his co-founder asked a better question: what if insurance could be embedded, like a subscription, right at the moment someone needs it?

That insight led to Walnut, an embedded insurance platform that helps fintechs, telcos, and other companies offer coverage in context. And in just a few years, that quiet rethink has turned into real traction, including $4.6M in funding and partnerships with players like Neo Financial.

This is a story about how Derek and the team got there and the founder’s lessons he’s sharing to help others build smarter, faster, and with intention.

From Student Side Project to Fintech Founder

Derek didn’t take the traditional founder path. In fact, his first company, RedFlagDeals, was something he built while still in school, simply as a way to learn.

“It was sort of like NerdWallet for Canada. I just wanted to help people shop smarter, and it took off.”

Eventually acquired by Yellow Pages in 2010, that project kickstarted Derek’s entrepreneurial career. After the exit, he dabbled in angel investing, but knew he wanted to be in the game, not just on the sidelines.

That led him to RBC, Canada’s largest bank, where he worked on innovation projects and unknowingly started down the path that would become Walnut.

The Spark: Seeing Insurance as the Forgotten Subscription

While at RBC, Derek and his soon-to-be co-founder were exploring the rise of consumer subscriptions, Spotify, Netflix, and SaaS platforms. That’s when they noticed something strange.

“There’s this whole category of spend, insurance, that’s just like a subscription, but people don’t treat it that way.”

That opened the door to a huge insight: Insurance could be transformed if offered like a digital subscription – contextual, easy, and embedded into moments that make sense.

And so, Walnut was born.

What Walnut Does (and Why It Works)

Walnut isn’t trying to be a flashy DTC insurance brand. Instead, they partner with companies who already have strong relationships with their customers, think fintechs, telcos, utilities, and embed insurance offers directly into key moments in the customer journey.

Buying a house? Get home insurance embedded into the mortgage process. Renting an apartment? Tenant insurance served right on time. Taking out a loan? Credit protection, one click away.

“We’re the ‘powered by’ layer. Our partners are the front-facing brand. We just make it seamless.”

This approach is better for everyone:

  • Consumers: less friction, more relevance.
  • Platforms: new revenue streams + stronger retention.
  • Insurers: diversified risk and better underwriting.

It’s a triple win, and that’s why Walnut is gaining ground fast.

From First Calls to First Partners

Launching in 2020 came with chaos, but also unexpected opportunity.

“During the pandemic, everyone was taking calls. We leaned on our network, investors, advisors, and friends of friends. That helped us get early conversations going.”

One of Walnut’s first big breaks? A partnership with Neo Financial, a fast-growing fintech based in Alberta.

“They moved quickly. They were open to testing and iterating. That speed was key.”

What made it work was Walnut’s flexibility. The team embedded directly into partners’ workflows, even offering real-time Slack support for integration and feedback.

“We could respond instantly. That’s something a traditional enterprise vendor just can’t do.”

Building for Trust: Security, Compliance, and Data

With embedded insurance comes data, and lots of it. Having worked at RBC, Derek knew what it would take to build a platform that could stand up to enterprise scrutiny.

“You eventually get to things like SOC 2 compliance. But even before that, it’s about how you design your APIs, your infrastructure, your processes.”

This early attention to security and privacy didn’t just help Walnut pass vendor reviews—it built trust with their partners from day one.

Traction + Funding: The $4.6M Milestone

In August 2024, Walnut announced a $4.6M funding round to expand its embedded insurance tech stack and grow its partner ecosystem.

But for Derek, the funding is just fuel, not the finish line.

“Raising capital is helpful, but it doesn’t change our focus. Are we solving the right problem? Are our partners better because of us? That’s what matters.”

What Derek Wants Other Founders to Know

Derek is humble, but he’s clear on one thing: building Walnut wasn’t about chasing a shiny idea; it was about solving a quiet but persistent problem.

And for wantrepreneurs sitting on an idea? His advice is simple but powerful:

“Start by learning. Don’t get attached to being ‘right.’ Your first idea probably won’t work exactly how you expect, and that’s okay.”

He points out that Walnut originally focused more on life insurance, but quickly discovered that other types (like tenant or credit insurance) had a far more natural fit in customer journeys.

“You have to test, adapt, and most importantly, take action. The worst thing is sitting on an idea and never doing anything. You won’t learn, and you won’t grow.”

Even if a venture doesn’t take off, Derek believes that builders come out stronger: more valuable to startups, enterprises, and especially in this new AI-driven landscape.

Looking Ahead

Looking ahead, Derek sees AI playing a major role in where Walnut is headed.

“There’s so much data being created. We want to use it to help people get the right protection, at the right time, in a way that feels effortless.”

In short: insurance that works like magic, because it’s built with empathy and intelligence.

And if that sounds ambitious, well, that’s kind of the point.

Final Thoughts: Paying It Forward

Derek Szeto has built, sold, invested, and started again. But what makes him stand out isn’t just his resume; it’s the clarity with which he shares what he’s learned.

This isn’t just a founder story. It’s a blueprint for solving real problems, growing with purpose, and staying human while doing it.

And in the spirit of GrowthMentor, it’s the kind of story that reminds us: You don’t need to go big overnight, just start by learning, building, and taking action.