Loop, a B-Corp auto insurance MGA that leverages AI, big data, and telematics to create more fairly priced insurance products, announced today it has closed a $3.25M seed round led by Freestyle VC, with participation from Blue Fog Capital, Fontinalis Capital Partners, Concrete Rose, Uprising Ventures, and Backstage Capital. Angel investors including Kristen Dickey, Steve Schlafman, Songe LaRon, Craig J. Lewis, Gerard Adams, and Joshua Dorkin also participated.
The auto insurance industry currently relies heavily on demographic factors like credit score and zip code to price customers, which Loop argues perpetuate structural bias against vulnerable communities. Loop instead has developed a proprietary and AI-based approach to pricing that measures road safety and their customers driving behavior on those roads, which in turn prices customers more equitably.
“The technology and data to assess risk more dynamically have long since been available, but insurers have been slow to adapt.” said Carey Anne Nadeau, Cofounder and Co-CEO of Loop. “We believe there’s a large market opportunity in pricing people more fairly and building a community-first brand in the auto insurance space.” added John Henry, Cofounder and Co-CEO of Loop.
The Auto Insurance industry is a $256bn annual market, of which usage-based insurance (UBI) programs like Loop are the fastest growing segment. The Covid-19 pandemic has accelerated the demand for UBI among consumers, with more than 30% of new policies sold today featuring telematics features of some kind. As more state legislators do away with criteria like credit score, Loop offers an alternative methodology that measures customers driving behaviours more directly.
“The size of this market combined with the community-first ethos has the potential to build a movement. We are thrilled to join Loop in making a difference in the lives of so many who are disadvantaged by legacy auto insurance models. This founding team is proven and uniquely combines Carey Anne’s deep technical and domain expertise with John’s go to market talents.” says Harris Brody, Managing Partner at Blue Fog Capital.
“Raising venture capital is normalized now, but it really is a unique and distinct privilege. Not many women or founders of colour get to go on this journey and we’re not taking it for granted.” said Henry. “We are deeply committed to and driven by our mission to create fair insurance for all.”