The death of a close relative poses two big challenges – grief and bureaucracy. An unusual Israeli startup, named Empathy, seeks to help people with both.
“The minute a person is informed of a relative’s death, a process begins that lasts about a year and a half and takes on average 540 hours,” said Ron Gura, Empathy’s cofounder and CEO.
“There are the immediate arrangements – choosing from burial, cremation and organ donation – and there’s the task of organizing the funeral, which in the United States is more similar to a wedding, with catering and invitations, and costs $10,000 on average.” Once that’s over, he adds, there are taxes, estate tax and endless bureaucracy.
Most Americans fall below the threshold for paying estate tax, but they have to report every death and all the deceased’s assets, along with their estimated value. And if that isn’t complicated enough, the rules governing tax obligations differ from state to state and sometimes even from county to county.
Empathy, which was founded in 2020, created an app to help make sense of this process. Once a grieving relative downloads it, they can close cable company or bank accounts with the click of a button, instead of waiting in line or sending faxes while still mourning.
Gura says that in the United States, death is a taboo subject. “These aren’t things that people talk about with friends, and there are no lectures on the internet and no comprehensive guides. So people sit with Google at night and search for answers.”
Gura recounts the story of Melissa, an Empathy user who lost her husband and was the sole beneficiary of his estate. There were issues with his pension paperwork, and she could not withdraw the money she needed in order to pay the mortgage.
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“This is an exhausting job that involves arguing with an unreceptive pension company in any case, and especially when you’re in mourning,” he says. “And in her case, she wasn’t functioning at all. She had trouble just leaving the house.”
The companies that mourners have to deal with are generally not their own service providers, but rather those of the deceased, so the person handling them may not be familiar with them. Empathy’s staff, he explains, are experts in this bureaucracy and “emotionally disconnected from specific cases.” In Melissa’s case, after she sent the death certificate and the pension form via her phone to the company, she got the money in two days.
“Take another example – American veterans who were drafted into the Korean or Vietnam wars,” he continues. “Thousands of them die every year, and their children don’t know anything about their service other than that their father was in the army. But they are entitled to benefits from the Department of Veterans Affairs.” Empathy helps them with this, too.
“There are countless other questions, like what do they do with the gun? What do they do with the dog? What’s the code for the car? What are the passwords for all the internet services? We provide answers to all these questions at Empathy.
The emotional burden
The Empathy app went live in April. Since then, Gura says, it has already helped “a significant single-digit portion” of its target market – the American one. The company says it helps bereaved families by streamlining process and helping with tasks like probating the will, final tax returns and estate management.
But bureaucracy, as noted, is only one element of the product. The app also seeks to help its users cope with the emotional burden. “We have thousands of content selections and audio clips from the field of psychology, from meditation through sleeping aids,” Gura says. These, too, are accessible via the app.
Although bureaucracy and mental health are two different spheres, Gura notes that when it comes to loss, they are completely intertwined. “They also intensify and exacerbate each other,” he adds. “Oftentimes, a person won’t close a relative’s bank account because they don’t want to talk with the teller about their mother’s death. They’ll postpone issuing a death certificate because they haven’t yet accepted this.”
The app is intended for use by families, he says. One relative might find the emotional support to be the most helpful service it offers, while another may cope with the grief by sorting out the bureaucracy.
Empathy also has a dual business model. One side involves direct sales to users. This entails a one-time payment of $65, and users are entitled to use the app as much as they please.
The second model, which is growing faster, involves selling the product through channels like funeral homes, nursing homes and insurance companies. As soon as customers contact such a company, it suggests downloading Empathy to assist them. In this case, the company that made the recommendation will also be included in the app. Under this business model, the user pays nothing; only the partner company pays Empathy.
“We recently announced a partnership with the largest life insurance company in the U.S., New York Life, which will expand the services it offers insured clients from financial aid alone to emotional and administrative support,” Gura says. “Via the app, the insurance company essentially creates a new, long-term relationship with potential new customers, who might then choose it when they need life insurance.”
Empathy has 33 employees, most of them in Israel. In April, it completed an usually large seed funding round of $13 million just this past April. And just last month, it raised another $30 million in Series A funding.
Gura explains that the company is swimming in a “blue ocean” – a new market with little competition – and “everything is done manually,” explaining why a small company that’s already making money would raise so much. Those funds, the company says, will go to expanding Empathy’s U.S. presence by releasing new products, hiring and forging partnerships. Down the road, they want to expand beyond the United States as well.
Gura founded the company together with Yonatan Bergman, who serves as chief technology officers. Both are veteran entrepreneurs. They previously started The Gift Project, which they sold to eBay in 2011 for tens of millions of dollars. After a few years at eBay, they moved to WeWork, where Gura was a senior vice president and ran the company’s Israeli development center.
The idea for Empathy, though, has been taking shape for about a decade, ever since he watched one of his American employees at eBay being forced to spend months dealing with the bureaucracy stemming from his wife’s passing.
“Every second around the world, somebody gets the ‘second job’ of coping with death, and in 85 percent of cases, there has been no prior planning for this event,” Gura says. He hopes that Empathy will also encourage people to plan for their own futures, and be mindful of the task they may leave behind to others.