Thanks to e-bikes and pre-fab homes, investors are proving insurance isn’t dead • TechCrunch


The ways we live and live have evolved over the past few decades.

For example, sales of e-bikes are outpacing sales of electric cars in the US, according to recent research. And, prefabricated and manufactured homes are gaining in popularity as housing shortages persist worldwide.

It seems that their popularity is not a temporary trend. Light Electric Vehicle Association He predicts More than 1 million e-bikes will be sold in the US by 2022. According to studies. Global E-bike market In the year It will be nearly $41 billion by 2030, a big jump from the projected $17.56 billion in 2021.

Meanwhile, US Census Bureau In the year By 2020, it is estimated that 22 million Americans will live in the current 6.8 million manufactured homes across the US. As of 2019, 10% of new single-family homes (including manufactured homes) are classified as manufactured homes.

Durability and cost are among the main reasons for the popularity of both e-bikes and manufactured homes. So it’s no surprise that startups are popping up to cater to the unique needs of both owners.

Infinite rider It is a new insurance company dedicated to serving riders of motorcycles, e-bikes and power sports vehicles. The Boston-based startup recently closed a $4.75 million seed funding round led by American Family Ventures, with participation from The Crew Country Group, SiriusPoint Re and Belmont Capital. The company previously raised $2 million in undisclosed seed funding.

CoverTree is a two-year-old startup coming out of hiding with $8 million in seed funding that closed in May. $2 million in previously raised “pre-seed” SAFEs. AV8 Ventures and Distributed Ventures co-led the seed financing, which included participation from Detroit Venture Partners, Ludlow Ventures and Anox Capital.

While both companies are targeting very different products, they both have one thing in common: a niche, digitally focused approach to a specific industry.

Historically, motorcycle and power sports insurance has been a subcategory of traditional auto insurance.

“There’s a difference between someone who drives their car to work and someone who rides their motorcycle, snowmobile, ATV or e-bike on the weekend,” said Blair Baldwin, CEO and co-founder of Boundless Rider. . “These are unique products with different features and they guarantee their own unique customer experience, experience and their own unique product design and coverage to be wrapped in a very large and wide product category.”

The Baldwin Boardless Rider is available as a standalone motorcycle, e-bike and power sports product that can be purchased directly from the company or ultimately bundled with another carrier’s homeowner or auto insurance product or purchased through the manufacturer at the time of purchase.

CEO of CoverTree Adarsh ​​Rachmale — who left his product management role at LinkedIn to focus on building insurance with Rishi Modi and Divyanesh Sharma — says the company’s goal is to focus exclusively on pre-fab or manufactured home residents. CoverTree believes its offering represents the first time consumers will purchase manufactured home insurance online.

“If it’s built in a factory—and that includes modular homes, tiny homes, and ADUs—we’ll guarantee it,” Rachmale told TechCrunch. “And because we pay attention, we do it a lot better.”

Developing markets

In particular, Baldwin predicts that demand for e-bikes will only increase, for which he believes “there is a small gap in the market.”

“E-bikes can be very expensive. They are very mobile and are often stolen,” he said. Many go 28mph or faster and there’s real liability if something goes wrong – if the bike is damaged or needs a replacement, or if someone has an accident that hurts someone else.

This isn’t Baldwin’s first insurance technology startup. He also co-founded Quit, which he was obtained at a MassMutual subsidiary in 2018. The entrepreneur went on to run a product innovation lab before being hired by MassMutual. American Family Ventures and Transnational Group to help build Rider Without Borders.

“There are about 7 million recreational ATVs and UTVs, some of which require insurance. There are about one and a half million snow bikes in the country. And now they’re selling about a million e-bike units a year, and that’s only expected to increase,” Baldwin told TechCrunch. “So when you look at this in aggregate, it’s a universe of about 20. million riders who are all underserved in the market today.

Boundless Rider plans to use the new capital on territorial expansion plans as well as building its data science capabilities. Base is combining its insurance product with an optional smartphone app with proprietary telematics features, Baldwin says.

for now, CoverTree is located in Arizona, Indiana, Michigan, New Mexico, Ohio, Illinois and Tennessee. He also plans to expand his new capital geographically as well as build out its technology, which includes automated texting. And AI for ranking.

Instead of working directly with consumers, the insurer’s strategy is to build its customer base by partnering with “major manufactured home industry stakeholders.”

“This helps us ‘pre-write’ policyholders with our choice of partners first,” Rachmale said. “And, online shopping provides better value for insurance consumers with additional information built on our own data sets, such as aerial roof images.”

According to Rachmanle, her competitors “increase costs and errors by manually writing with people” because automation makes texting more affordable.

Ultimately, CoverTree hopes to enter Boundless Rider territory.

“From our independent survey, manufactured home owners are more likely than home owners to own things like RVs, motorcycles, ATVs and boats,” Rachmale said. “Ultimately our plan is to build a brand of insurance technology to protect manufactured homes and these ‘toys,’ or the outdoor lifestyle for middle America.”

VCs writing checks

Investors seem to like startups’ unique approaches.

Adam Blumenkranz, a partner at Distribution Ventures, believes that the manufactured home industry will play a more significant role “only for a large segment of the population in the future.”

“For this hard-to-serve insurance segment, Rethinking Homeowner’s Insurance was a perfect fit in the market and has the potential to expand into other risk management-related products,” he wrote in an email.

AV8 Ventures partner Amir Kebir said he was impressed. CoverTree’s ability to “build the company with limited resources and create key relationships with major insurance carriers and manufactured home communities.

Kyle Beatty, managing director of American Family Ventures, said the firm has seen and believed in partner-based insurance distribution many times.[s] If done well, it offers significant volume and cost benefits.

“In addition, we believe that mobile technology provides benefits for customer retention, and we had an initial role in organizing a professional founding team,” he wrote in an email.

As the larger insurance industry continues to struggle, it will be interesting to see if such specialty insurers succeed.

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