High Definition Vehicle Insurance announced on Wednesday that it raised $16 million to help drivers keep on truckin’ ... safely.
The Chicago company plans to spend the cash on insuring truck drivers in new markets, building out its team and developing its product. The insurtech startup uses software to monitor drivers’ safety and operational compliance, with the ultimate aim of lowering their accidents and decreasing fleet insurance costs.
“There is certainly an opportunity to build a very large, successful insurance standalone business here,” CEO and co-founder Chuck Wallace told Built In.
In 1999, Wallace co-founded Esurance, and helped build the digital insurance business until it was acquired by Allstate for $1 billion in 2011. Seven years later, he went on to launch HDVI with venture capital investor Reid Spitz.
Today, HDVI uses computer vision, telematics, electronic logging devices and more to gather data about individual truckers’ operations. The company crunches the numbers to provide real-time updates and insights on drivers’ movements to small- and medium-sized fleet managers, who generally oversee between five and 125 trucks at any given time. Managers and drivers who adhere to HDVI’s suggestions can be rewarded with a discount on their insurance — a rarity in an industry that regularly sees double digit increases in their annual premiums, Spitz said.
The company plans to spend the funds on developing its tech platform, upgrading its user experience that offers real-time tips for drivers to navigate roads more safely, building stronger back-office integrations for validating truckers’ federal driving qualifications and connecting more of its many data sources through APIs.
“We manage that data so that we can bring insights back to the fleets,” Wallace said. “So they know what’s going on out there in the fields of their trucks, and their drivers, their [Department of Transportation] inspections, and then can respond accordingly.”
In addition to building out the new tech features, HDVI plans to expand beyond its current availability in Tennessee and Alabama and enter six new markets by the end of the year — Minnesota, Illinois, Ohio, Indiana, Texas and Georgia.
The company is far from the only insurtech startup to receive investment recently — venture capitalists have opened their wallets to Rippling, AgentSync and Hippo over just the last month. But Wallace actually credits the company’s growth to the capital gains in the fintech industry. Over the past 15 years, he said investors have watched their fintech investments mature, and now realized that insurance is the next space that is ripe for venture-driven innovation.
“Insurance is just another form of a financial services company,” he said.
The 25-person company plans to hire five new engineers, product managers and data scientists this year and, by the end of 2021, aims to double in size to 60 people. 8VC and Munich Re Ventures led the Series A round, with participation from Qualcomm Ventures and Autotech Ventures.
