Tag: telematics

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Connected car insurance startup Flock raises $17M Series A led by Chamath Palihapitiya

Cast your mind back to that scene in Minority Report where all those autonomous cars are whizzing through the city. The more practically-minded of you may well have gone: “Yeah, but what about the insurance…?”.

Among the startups building the on-demand, connected insurance world for the vehicles of tomorrow right now are UK-based Zego which has raised $201.7 million. Another is Flock.

Emerging from an academic project to look at drones, Flock shifted into providing drones insurance then commercial vehicle insurance. The twist is that it hooks into the telematics of cars so that the vehicle only triggers insurance cover when it’s actually moving, not when it’s sitting on the lot, incapable of causing any accidents.

Flock has now raised $17 million in a Series A funding led by Social Capital, the investment vehicle run by Chamath Palihapitiya, best known as a SPAC investor and Chairman of Virgin Galactic. Flock’s existing investors Anthemis and Dig Ventures also participated. This round brings Flock’s total funding to $22 million. Justin Saslaw (Social Capital’s Fintech Partner) joins Flock’s Board of Directors as does Ross Mason (Founder of Dig Ventures & MuleSoft).

Ed Leon Klinger, CEO of Flock said: “Transportation is changing faster than ever, but the traditional insurance industry can’t keep up! The proliferation of electric cars, new business models such as ridesharing, and the emergence of autonomous vehicles pose huge challenges that traditional insurers just aren’t equipped for.”

He added: “Modern fleets need an equally modern insurance company that moves as fast as they do. Commercial motor insurance is a $160Bn market, crying out for disruption. The opportunity ahead of us is enormous.”

In a statement Chamath Palihapitiya, CEO of Social Capital said: “Flock is bridging the gap between today’s insurance industry and tomorrow’s transportation realities. By using real-time data to truly understand vehicle risk, Flock is meeting the demands of our rapidly evolving, hyper-connected world. Flock has the potential to help unlock and enable a truly autonomous world, and even save lives. We’re excited to be a part of their journey.”

Speaking to me over a call, Klinger outlined how the company had hit a sweet spot by hooking into Telematics APIs for cars, or by doing special integrations with existing providers and OEMs: “We’ve built our own integrated approach whereby we partner with some and we build bespoke integrations with them. Often they are not as advanced as others. So we’ll either use our integration platform or or we’ll use their approach. We’re highly flexible. The core value proposition at Flock is its flexibility, so we don’t force our own integration approach.”

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SmartDrive snaps up $90M for in-truck video telematics solutions for safety and fuel efficiency

Trucks and other large commercial vehicles are the biggest whales on the road today — are they also, by virtue of that size, some of the most dangerous and inefficient if they are driven badly. Today, a startup that has built a platform aimed at improving both of those areas has raised a large round of funding to continue fuelling (so to speak) its own growth: SmartDrive, a San Diego-based provider of video-based telematics and transportation insights, has snapped up a round of $90 million.

The company is not disclosing its valuation but according to PitchBook, it was last valued (in 2017) at $290 million, which would put the valuation now around $380 million. But given that the company has been growing well — it says that in the first half of this year, its contracted units were up 48%, while sales were up by 44% — that figure may well be higher. (We are asking.)

The funding comes at an interesting time for fleet management and the trucking industry. A lot of the big stories about automotive technology at the moment seem to be focused on autonomous vehicles for private usage, but that leaves a large — and largely legacy — market in the form of fleet management and commercial vehicles.

That’s not to say it’s been completely ignored, however. Bigger companies like Uber, Telsa and Volvo, and startups like Nikola and more are all building smarter trucks, and just yesterday Samsara, which makes an industrial IoT platform that works, in part, to provide fleet management to the trucking industry, raised $300 million on a $6.3 billion valuation.

The telematics market was estimated to be worth $25.5 billion in 2018 and is forecast to grow to some $98 billion by 2026.

The round was led by TPG Sixth Street Partners, a division of investment giant TPG (which backs the likes of Spotify and many others), which earlier this year was raising a $2 billion fund for growth-stage investments. Unnamed existing investors also participated. The company prior to this had raised $230 million, with other backers including Founders Fund, NewView Capital, Oak Investment Partners, Michelin and more. (NEA had also been an investor but has more recently sold its stake.)

SmartDrive has been around since 2005 and focuses on a couple of key areas. Tapping data from the many sensors that you have today in commercial vehicles, it builds up a picture of how specific truckers are handling their vehicles, from their control on tricky roads to what gears and speed they are using as they go up inclines, and how long they idle their engines. The resulting data is used both to provide a better picture to fleet managers of that performance, and to highlight specific areas where the trucker can improve his or her performance, and how.

Analytics and data provided to customers include multi-camera 360-degree views, extended recording and U-turn triggering, along with diagnostics on specific driver performance. The company claims that the information has led to more satisfaction among drivers and customers, with driver retention rates of 70% or higher and improvements to 9 miles per gallon (mpg) on trips, versus industry averages of 20% driver retention and 6 mpg.

“This is an exciting time at SmartDrive and in the transportation sector overall as adoption of video-based telematics continues to accelerate,” stated Steve Mitgang, SmartDrive CEO, in a statement. “Building on our pioneering video-based safety program, our vision of an open platform powering best-of-breed video, compliance and telematics applications is garnering significant traction across a diverse range of fleets given the benefits of choice, flexibility and a lower total cost of ownership. The investment from TPG Sixth Street Partners and our existing investors will fuel continued innovation in areas such as computer vision and AI, while also enhancing sales and marketing initiatives and further international expansion.”

The focus for SmartDrive seems to be on how drivers are doing in specific circumstances: it doesn’t seem to suggest whether there could have been better routes, or if better fleet management could have resulted in improved performance. (That could be one area where it grows, or fits into a bigger platform, however.)

“SmartDrive is a market leader in the large and expanding transportation safety and intelligence sector and we are pleased to be investing in a growing company led by such a talented team,” noted Bo Stanley, partner and co-head of the Capital Solutions business at TPG Sixth Street Partners, in a statement. “SmartDrive’s proprietary data analytics platform and strong subscriber base put it in a great position to continue to capitalize on its track record of innovation and the broader secular trend of higher demand for safer and smarter transportation.”

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Lightfoot gets $4M to nudge more drivers to go smooth with a ‘Fitbit for cars’

UK car tech startup lightfoot, which sells a telematics system that gives real-time feedback to drivers combined with a rewards platform to further incentivize good driving, has picked up £3.2 million (~$4M) from London-based early-stage venture fund BGF.

Former Dyson CEO, Martin McCourt, also contributed to the investment, and will join lightfoot’s board as a non-executive chairman.

The startup has previously received grant funding from government-backed Innovate UK and later an innovate loan. But this looks to be their first tranche of VC. And a spokesperson confirmed it’s being treated as a Series A.

Lightfoot’s telematics device, which it bills as a sort of ‘Fitbit for cars’, plugs into a vehicle’s onboard computer and rests on the dashboard — where the driver can easily see the visual cues it provides as they drive (using a traffic light color-coded feedback system).

The idea is to offer a more reciprocal alternative to traditional ‘blackbox’ telematics systems which just record driving data and don’t give the driver an opportunity to improve their driving.

Smoother driving is linked to reduced fuel consumption, lower emissions and a lower risk of accidents. So there are plenty of reasons why fleet owners — lightfood’s initial target for the tech — might want to encourage it.

On the driver side lightfood combines real-time feedback with a rewards platform that offers individual incentives, such as lower insurance premiums and deals-related discounts on things like restaurants, holidays, days away and retail.

It uses a gamification approach here, with a so-called ‘Elite Driver’ status being needed to unlock rewards. A driving score of 85% required to reach that status. Lightfoot says 80% of its users hit the mark and are able to remain there, while 97% achieve Elite Driver status “at some point”.

The company was launched in 2013, by entrepreneur Mark Roberts, and now has more than 20,000 drivers using the tech across more than 150 fleet clients — including Virgin Media, Dixons Carphone, Southern Water, Ecotricity, Greencore and Dyno Rod.

It’s opening up to individual motorists with a UK consumer launch today, and plans to expand the proposition globally being slated as “already underway”.

It says the new investment will be used to feed these growth plans, including ramping up hiring across the business.

Commenting in a statement, Ned Dorbin, BGF investor and new lightfoot board member said: “Lightfoot is a vibrant, smart and ambitious business with a first-class management team. After five years of operation, they have established a strong reputation in the market and developed a clear strategy for growth.”

“We’re on a mission to change the way people think about driving. And to make it fun again,” added Lightfoot’s founder and CEO, Mark Roberts, in another supporting statement. “We want everyone to enjoy the amazing benefits that smoother driving can have on their wallets and our planet.

“So far, we’ve created a community of Lightfoot drivers who are earning better deals for better driving – now, we’re excited to grow this with more like-minded motorists who believe good driving deserves rewarding.”

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Ford’s new SmartLink connected upgrade for older vehicles will be available mid-2018

Ford is finally detailing availability of its FordPass SmartLink accessory, an OBD II plug-in device with Verizon 4G LTE on board which can add connected car features to model year 2010 to 2017 Ford vehicles that don’t already have native connectivity built in.

The FordPass accessory will be available across the U.S. sometime in the middle of this year, with dealer enrolment now open. Dealers will provide the device to end users, providing installation for the add-on hardware, which will then cost users $16.99 per month for 24 months to get telematics services including remote key fob (via smartphone), car location and vehicle health alerts. The Verizon 4G LTE hotspot feature is an additional cost, but users will get a free trial for 30 days or until they reach 1GB of data usage.

This is a way for Ford to build up its data business even on existing vehicles out in the market, even while it also aims to have 100 percent of its new car lineup shipping with connectivity built-in by next year. Data is the new oil, so to speak, when it comes to the automaker value chain, and having as many customers as possible feeding that funnel is the best way for car companies and anyone in transportation to prepare for the future.

On the consumer side, the value proposition is a bit more questionable. Owners of older vehicles are probably less likely to value connected features, and the ones that are included with the base $17 per month subscription fee over the course of two years (so $408 in total) include nice-to-have, but definitely not essential benefits. The Wi-Fi hotspot is the real carrot, but it’s an additional cost in monthly data service over and above the base fee.