July 30, 2021: -On June 3, one of London’s hottest days of the year so far, Chamath Palihapitiya, an early Facebook executive turning tech investor, had lunch on the rooftop of The Ned hotel with the co-founders of insurance start-up Flock, Ed Klinger, and Antton Pena.
The young entrepreneurs appear to keep their cool that day as Palihapitiya is investing $10.6 million into its series A round through his venture capital firm Social Capital. Other investors will put in around $6 million at an undisclosed valuation.
Founded in 2015, Flock started by providing insurance to commercial drone operators like Netflix, the BBC and a medical delivery service operated by the National Health Service of Britain. The company’s “real-time risk engine” allows it to charge customers per flight instead of asking them to take out an annual policy, as many traditional insurers do. In July 2020, it started offering similar products to companies in the automotive sector.
“This is the industry where we’re growing the fastest,” Klinger, Flock’s CEO, told CNBC, which adds that his start-up wants to disrupt the “clunky and slow” $160 billion commercial motor insurance market, which is dominated by traditional insurance firms such as Aviva and Direct Line.
“We’ve built a technology that can price insurance on a per second and per meter basis,” he said. “Every single journey is priced independently.”
Flock’s “usage-based” products are designed to harness the driving data from telematics devices in cars, vans, and trucks to determine how much the customer should be charged.
It wants to sign up companies with thousands of couriers like Amazon as customers and ride-hailing firms such as Uber. Self-drive hire companies such as Virtuo and Jaguar Land Rover’s The Out have already signed up as customers.
Social Capital has already backed several automotive and drone start-ups.
“We’re building a core piece of the financial infrastructure that’s going to allow those companies to succeed and help the companies mitigate risk and ultimately save lives,” said Klinger.
In a statement, Palihapitiya said, “Flock is bridging the gap between today’s insurance industry and the coming transportation realities.”
He added, “By using real-time data to understand vehicle risk truly, Flock is meeting the demands of our rapidly evolving, hyper-connected world. Flock has the potential to unlock and enable a truly autonomous world and even save lives. We’re excited to be a part of their journey.”