Analytics startup WePredict raised $4 million in a funding round led by Munich Re’s venture capital arm HSB Ventures. Munich Re is also teaming with the company as it launches its first auto industry-focused product.
Existing investors Breed Reply and the Development Bank of Wales also participated in the financing.
WePredict, a UK-based operation, said work with auto, agriculture and construction equipment and their respective supply chains/ warranty claim processes has fueled its product development.
WePredict said its initial product targets the automotive industry, particularly original equipment manufacturers, but it will have wider reach in other sectors over time. The firm said it has come up with “an accurate, consistent way to use initial repair and telematics data to determine long-term product reliability, and as a result, warranty claims.” By doing so, WePredict said companies will be able to both better estimate and also understand their warranty reserves.
Munich Re’s hopes to put some of this technology to work for its own customers. The reinsurer plans to develop an insurance product that backs WePredict’s calculation. As WePredict explains in its funding announcement, the insurance product will help provide greater certainty to adjustments in warranty reserves, and, in turn, help clients reallocate funds to working capital and have greater balance sheet efficiency in the process.
Jeffrey Sirr, Head of Munich Re’s Corporate Insurance Partner North America division, said that a strategic relationship with WePredict would have multiple benefits.
“This allows us to build out our own capabilities for innovative products and services, and to provide new insights and offerings to our clients that enable their business models and enhance their business opportunities,” Sirr said in prepared remarks.
James Davies, founder and CEO of WePredict, said a strategic relationship with Munich Re is an important step toward expanding more broadly across the manufacturing spectrum.
“We are constantly looking for new ways to enable our customers to benefit from the accuracy of our product failure predictions. We see vast possibilities to expand these applications,” Davies said in prepared remarks. “With the help of Munich Re we are taking this a step further and allowing automotive original equipment manufacturers to free up a portion of their balance sheet to use more productively in their business.”