British drone insurer Flock has raised $17 million from investors in early-stage funding led by venture investor Chamath Palihapitiya’s Social Capital, Flock said on Thursday.
Flock started out insuring commercial drones, and added car and van fleets last year. It provides so-called usage-based insurance, adjusting premiums according to real-time information such as weather conditions and distance traveled.
Trends such as ride-sharing and same-day delivery require new types of insurance, CEO Ed Leon Klinger said, as the world also looks ahead to driverless cars.
“These customers are changing very, very quickly but the world of insurance hasn’t really adapted.”
Flock, which started in 2018, said its drone insurance book made up more than 35% of the UK commercial drone market, with clients including the BBC, Netflix and the National Health Service. Motor insurance clients include Jaguar Land Rover.
“Flock has the potential to help unlock and enable a truly autonomous world, and even save lives,” said Social Capital CEO Palihapitiya, who is also the chair of space tourism firm Virgin Galactic Holdings.
Klinger declined to give a valuation for Flock but said it was growing rapidly and may seek further funds from investors next year.
The COVID-19 pandemic had spurred demand for its product, as fleet managers were able to save on insurance costs when business lockdowns left cars unused, Klinger said.
Flock currently has around 20 staff but is hiring 60 more, and plans to expand its motor business into Europe, he added.
Insurtech, a fast-growing segment of the financial technology, or fintech, industry, has benefited from investor interest in startups, with the traditional insurance industry considered slow to change and to adopt technology.
Global insurtech funding exploded to $7.4 billion in the first half, making 2021 a record funding year already, insurance broker Willis Towers Watson said on Thursday.
Existing Flock investors Anthemis and Dig Ventures also participated in the series A funding round.