#147: How a Philadelphia Insurance Agent Built the Uber of Surety Bonds - Aaron Steffey

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Jun 6, 2025

Aaron Steffey, co-founder and co-CEO of Propeller, a transformative platform for issuing surety bonds, shares his journey from insurance agent to tech entrepreneur. He discusses how the pandemic accelerated a shift in the traditional, paper-heavy surety bond market to a more digital approach. With innovative strategies, Propeller achieved rapid growth, raising $7 million in funding and ultimately selling to Arch Capital. Aaron emphasizes the importance of endurance in entrepreneurship, reflecting on challenges faced and the thrill of revolutionizing a $7 billion industry.

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INSIGHT

Surety Bonds Explained

Surety bonds serve as financial guarantees mostly in construction and compliance.
They are distinct from insurance but closely related, providing trust backing for contractors and projects.

INSIGHT

Digitizing Paper-heavy Market

Digitizing surety bonds eliminated "death by a million paper cuts" caused by varied, complex forms across jurisdictions.
COVID accelerated acceptance of electronic notarizations and signatures, enabling digital launch and growth.

ANECDOTE

Equity for Tech Development

Propeller formed a joint venture with an Australian software company that accepted equity instead of fees.
This allowed Propeller to build their technology with less upfront capital but led to multi-million dollar tech development.

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Aaron Steffey is the co-founder and co-CEO of Propeller, an online platform that enables insurance agents and brokers to issue surety bonds instantly — without the lengthy paperwork or back-and-forth typically involved in bonding. Aaron was an insurance agent, and his co-founder cousin, Chris, was a surety bond underwriter before 2019, when they set out to revolutionize the way surety bonds are bought and sold.

They initially bootstrapped with a software development partner who accepted equity instead of fees. Their first version drastically simplified the process of buying and selling surety bonds in the digital world, allowing them to grow quickly. They raised $7 million in SAFE notes from strategic partners to accelerate growth in 2021 and grow to nearly $20 million in revenue. They sold 100% of the company to Arch Capital in a strategic acquisition in early 2024.

In this episode, Aaron also talks about:

How this sleepy, paper-based market changed quickly in COVID
Why they raised growth funding from strategic investors and not VCs
Why they sold the company and are still leading the business after the sale

Quote from Aaron Steffey, co-founder and co-CEO of Propeller

“My biggest advice for startup founders is simply just that endurance wins. It’s the whole thing of getting back up after you're knocked down, like everyone says. I had to live that so many times. So many No's when it came to our first carrier pulling out. No, I don't want to invest. No, I don't want to use your surety product.

“There were so many times when I wanted to give up. And the same with my cousin. Had we not founded the company together, I don't know that we would have continued because there were probably times when I would have given up.

“As long as both of us weren't on the floor, one of us would just pick the other up when the other person usually was more sane, and we dragged each other along.

“A successful founder needs to have a pretty high pain tolerance and endurance to succeed. You just have to keep pushing forward. It just sounds so cliche, but that’s what it was for us.”

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