Today, the auto insurance industry is rife with prejudice; pricing on things many would say has little or nothing to do with their conduct. Things like your credit score, income level, and education level make up the majority of your price. Layer in a global pandemic, record unemployment numbers, and a generation of more social justice oriented consumers, and you have a major challenger in the industry waiting to be founded. Enter LOOP. An insurance company adapted to the new world in which we live. Founded by serial entrepreneur John Henry and Carey Anne Nadeau, an MIT alumnus, LOOP was formed as a public utility so that “mission” was in its founding DNA. Their objective? Create fair insurance for everyone using a fully technology-driven method to price, engage and insure customers. Today, this approach allows ordinary people to save an average of 35% on their auto insurance premiums.
The duo seized on an opportunity that seems obvious in hindsight: a next-gen auto insurance company that looks, feels, and operates exactly like the best tech solutions we’ve come to expect from nearly every other industry. They leverage social media versus traditional TV ads, insure only through a mobile app versus retail space, and use modern trends like NFTs and the Clubhouse to create what they want. claim to be “community fueled growth”. In the past 9 months alone, LOOP has increased a waiting list of over 30,000 people waiting to ride with and be insured with what many see as a better way to purchase auto insurance.
In an effort to build a successful brand that can successfully challenge incumbents in a capital intensive market, LOOP has had to raise a lot of money. In January of this year, they closed a $ 3.25 million funding round. This week, LOOP announced a $ 21 million Series A round led by Foundry Group and 01 Advisors; making it one of the biggest ever created by a founder of color. The cycle includes participation by rap icon and avid angel investor Nas, media companies like Earn Your Leisure and leading institutional VCs like Freestyle, Uprising Ventures, Backstage Capital and Concrete Rose.
Henry believes LOOP was created for this exact moment. “Our generation is no longer waiting for others to create change. Our community demands fairness, representation, honesty and transparency in financial services. What we are proving is that being rooted in values is not nice to have, it is a consumer demand. said Henri.
“There is a confluence of factors that make LOOP only possible right now.” Nadeau added. “From consumer sentiment to technological advancements and the current state of capital markets flowing to various founders. Now is the time to build a category-defining business and brand.
While the duo don’t believe the demand for fairer insurance will decrease, LOOP recognizes the potential regulatory hurdles that lie ahead. The US auto insurance industry is a whopping $ 256 billion annually and has one of the fiercest lobbies to keep the status quo in place.
“Innovation will not be stopped,” Henry says in response to potential opposition. “It’s bigger than any business. These are the reflections of a new generation of consumers. Ask the Taxi and Limousine Commission how it worked to choke Uber. We are not the arbiters of the truth: the market is. And the market speaks.
Henry and Nadeau’s vision for LOOP is to build the most honest and transparent financial services company in the world. They say they are “not interested in an acquisition price, but in a listing price”, alluding to ambitions to take the company public in the future. Only time will tell if they will grow faster than incumbents can adapt, but one thing is certain: LOOP has a chance to change the insurance industry for good.
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