Billionaire investor Chamath Palihapitiya backs UK insurance coverage start-up because it pivots from drones to vehicles

Enterprise capitalist Chamath Palihapitiya.

Mark Kauzlarich/Bloomberg by way of Getty Pictures

LONDON — On June 3, considered one of London’s hottest days of the yr up to now, Chamath Palihapitiya, an early Facebook govt turned tech investor, had lunch on the rooftop of The Ned resort with the co-founders of insurance coverage start-up Flock: Ed Klinger and Antton Pena.

The younger entrepreneurs seem to have stored their cool that day as Palihapitiya is now investing $10.6 million into the corporate’s collection A spherical by means of his enterprise capital agency Social Capital. Different traders are placing in round $6 million at an undisclosed valuation.

Based in 2015, Flock began out by offering insurance coverage to industrial drone operators resembling Netflix, the BBC and a medical supply service operated by Britain’s Nationwide Well being Service. The corporate’s “actual time threat engine” permits it to cost prospects per flight as an alternative of asking them to take out an annual coverage like many conventional insurers do. In July 2020, it began providing the identical product to corporations within the automotive sector. 

“That is the business the place we’re rising the quickest,” Klinger, Flock’s CEO, informed CNBC, including that his start-up needs to disrupt the “clunky and sluggish” $160 billion industrial motor insurance coverage market, which is dominated by conventional insurance coverage companies like Aviva and Direct Line.

“We have constructed a know-how that may primarily value insurance coverage on a per second and per meter foundation,” he stated. “Each single journey is priced independently.”

Flock’s “utilization primarily based” merchandise are designed to harness the driving information from telematic gadgets in vehicles, vans and vans to find out how a lot the client ought to be charged.

It needs to enroll corporations with hundreds of couriers like Amazon as prospects, in addition to ride-hailing companies like Uber. Self-drive rent corporations like Virtuo and Jaguar Land Rover’s The Out have already signed up as prospects.

Social Capital has already backed numerous automotive and drone start-ups.

“We’re constructing a core piece of the monetary infrastructure that is going to permit these corporations to succeed and assist these corporations mitigate threat, and in the end save lives,” stated Klinger.

In an announcement, Palihapitiya stated “Flock is bridging the hole between as we speak’s insurance coverage business and tomorrow’s transportation realities.”

He added: “By utilizing real-time information to actually perceive automobile threat, Flock is assembly the calls for of our quickly evolving, hyper-connected world. Flock has the potential to assist unlock and allow a really autonomous world, and even save lives. We’re excited to be part of their journey.”

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