Loop, a B-Corp MGA focused on using AI, big data and telematics to build more inclusive auto insurance, announced the close of a $3.25 million seed round on Wednesday.
Freestyle.VC led the funding round, with participation from Blue Fog Capital, Fontinalis Capital Partners, Concrete Rose, Uprising Ventures and Backstage Capital.
Loop has developed a proprietary and AI-based approach to auto insurance pricing that measures road safety and customer driving behavior on the roads. The startup’s executives are committed to the idea of replacing the demographic factors like credit score and ZIP code, traditionally used in pricing. They argue that those factors perpetuate structural bias against vulnerable communities, while Loop’s AI-based approach 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, co-founder 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, another co-Founder and co-CEO.
Nadeau is an MIT-trained statistician and city planner, former researcher at the Brookings Institution, and founder and CEO of the open data and predictive-modeling company Ometry.
Ometry, formerly known as ODN, was one of 10 finalists in the QBE Urban Resilience Challenge—a countrywide initiative highlighting impactful innovation to power resilience within city ecosystems. (Ometry was not ultimately the winner of the competition.)
Henry brings media and mission-driven expertise, having been the co-founder of the diversity-focused VC firm Harlem Capital, executive producer and host of HUSTLE on VICE TV, and founder and CEO of Mobile City Services (an on-demand service suite, offering busy professionals dry-cleaning, laundry and housecleaning, according to his LinkedIn profile. A fuller story, written up on Forbes and Atlanta Black Star explains how the doorman-turned-entrepreneur leveraged relationships to provide those dry-cleaning services to the film and TV industry, ultimately leading Mobile through an acquisition).
Nadeau and Henry teamed up to start Loop in July 2020 after the George Floyd events inspired them to take on a meaningful challenge.
In a statement about Loop’s seed funding, Dave Samuel, founder and managing partner at Freestyle.VC, said, “Carey Anne and John are top-decile founders taking on a once-in-a-generation opportunity to transform an industry that touches so many lives,” adding that the special team brings “a highly defensible approach to a worthwhile problem.”
As more state legislators do away with criteria like credit score, Loop offers an alternative methodology that measures customers driving behaviors more directly, the statement said.
“The size of this market combined with the community-first ethos has the potential to build a movement,” said Harris Brody, managing partner at Blue Fog Capital, stressing the prospect that Loop will make a difference in the lives of people 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,” Brody said.
“Raising venture capital is normalized now, but it really is a unique and distinct privilege. Not many women or founders of color 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.”
Angel investors including Kristen Dickey, Steve Schlafman, Songe LaRon, Craig J. Lewis, Gerard Adams and Joshua Dorkin also participated in the seed round.
Source: Loop Insurance