Brazilian auto insurance startup Justos raised $2.8m in a seed round led by one of the largest VC firms in Latin America Kaszek along with a slew of experienced angel investors including CEOs of seven unicorns.
Other participants include Big Bets, along with Assaf Wand, CEO and co-founder of Hippo Insurance; David Vélez, founder and CEO of Nubank; Carlos Garcia, founder and CEO of Kavak; Sergio Furio, founder and CEO of Creditas; Patrick Sigrist, founder of iFood and Fritz Lanman, CEO of ClassPass. Senior executives from Robinhood, Stripe, Wise, Carta and Capital One also participated in the round.
Founded in 2020 by Dhaval Chadha, Jorge Soto Moreno and Antonio Molins who have all worked at various Silicon Valley-based companies including ClassPass, Netflix and Airbnb, Justos claims it will be the first Brazilian insurer to use drivers’ data to reward those who drive safely by offering fairer prices.
After researching segments and business models, the founders concluded that while the auto insurance market was in high demand since more than 70% of cars are uninsured, it still lacked innovation.
Justos uses information about how users drive to set the insurance price. With an app installed on the driver’s cell phone, the startup is able to measure acceleration, braking, speeding and others and, based on this data, defines risk and pricing models based on the driver’s driving quality.
It claims that it will offer plans that are up to 30% cheaper than traditional plans and give additional discounts each month based on the driving patterns of the previous month of each customer.
Alongside cutting costs, it will also make the process quicker. Justos will use artificial intelligence and computerized vision to analyze and process claims more quickly and machine learning for image analysis and to create bots that help accelerate claims processing.
Justos plans to use its new capital to set up operations, such as forming partnerships with reinsurers and an insurance company for fronting, since it is starting as a managing general agent. It’s also working on building out its products such as apps, its back end and internal operations tools, as well as designing all its processes for underwriting, claims and finance. Justos’ data science team is also building out its own pricing model.
The startup will be focused on Brazil, with plans to eventually expand within Latin America, then Iberia and Asia.
The startup will offer its product directly to its customers as well as through distribution channels like banks and brokers. The insurance contract can be done by app, website or WhatsApp, but at the moment it is only possible to join a waiting list. The insurance sales begin later this year.
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