It’s just human nature. If you tell a driver that his insurance premium will go down if he drives more safely, it turns out that he will probably also drive more safely. Scale that up to full commercial fleets and the cost savings can become very significant. However, the trick is to do the tracking in the first place.
So it’s fascinating to think about that research how to insure drones led to the creation of the British startup Herdwhich uses real-time data to insure fleets.
Ed Leon Klinger and Antton Pena were both working on two academic research papers, the first at Cambridge University, the latter at Imperial College London, when they got an idea. “The first product we launched was in the drone industry. It was a pay-as-you-fly drone insurance product that used drone data. And actually that was our stepping stone to commercial engine. We built technology. And we built an ability to use real-time data by being born in the drone industry,” Klinger tells me.
When they came up with the idea of insuring drones only when flying, Klinger and Pena realized that cars could be insured in the same way, and added the idea of gamifying drivers to drive more safely.
The result was Flock in 2018, which raised $17 million in a Series A in 2021.
And while the United Kingdom is located Zego having raised $281.7 million so far to do something similar (in terms of insurance fleet tracking), Flock now appears to be in Zego’s rear-view mirror. Indeed, insurance giants such as AIG and Allianz are likely to be competitors in this space today as well.
Flock has now expanded its war chest with a $38 million Series B financing led by Octopus Ventures (via Octopus partner Malcolm Ferguson), with CommerzVentures. Existing investors also participated, including Social Capital (led by Chamath Palihapitia), Dig Ventures (the family office of MuleSoft founder Ross Mason), Anthemis and Foresight Ventures. Flock’s Series A was led by Palihapitia in 2021.
Flock now claims more than 600 commercial fleet customers, including Jaguar Land Rover, European electric car subscription company Onto, and a third of the UK’s independent Amazon fleets, it says.
Flock says using telematics enables customers to understand risk and identify high-risk drivers and routes. This helps them to reduce the crash rate by as much as 10%. Safer driving is then rewarded with lower insurance premiums.
Klinger, Flock’s CEO, told me over the phone, “We’ve grown our revenues about 30 times since Series A. We only recently launched our railcar product and we’ve gained about 600 commercial customers. Those are commercial fleets. About a third of the UK is Amazon fleets and we now insure about a third of those fleets. We also work with around 100 commercial insurance brokers in the UK and I think this is one of the main reasons we have been able to establish a Series B.”
The funding round comes at a time when Series B and growth stage funding rounds are somewhere rarer, making Flock’s performance more remarkable in terms of the company’s and team’s fundamentals.
The round will be used to expand into new segments of the commercial auto industry and into new geographies.
Malcolm Ferguson, Partner, Octopus Ventures, said in “a statement:” Flock has a vision that can make the world a safer place, not only for today’s vehicles, but also for tomorrow’s connected and autonomous vehicles.
