It’s only human nature. If you tell a driver their insurance premium will go down if they drive more safely, then – it turns out – they will probably drive more safely. Scale that up to entire commercial fleets and the costs saving can become extremely significant. However, the trick is to do the tracking in the first place.
So it’s fascinating to think that research into how to insure drones led to the creation of U.K. startup Flock, which uses real-time data to insure car fleets.
Ed Leon Klinger and Antton Pena were both working on two academic research papers, the former at Cambridge University, the latter at Imperial College London, when they had 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 into commercial motor. We built technology. And we built a capability to use real-time data by being born in the drone industry,” Klinger tells me.
Stumbling on the idea of insuring drones only when they were flying, led Klinger and Pena realised that cars could be insured the same way, as well as adding in the idea of gamifying drivers into driving more safely.
The result was Flock in 2018, which went on to raise $17 million in a Series A in 2021.
And, while U.K.-based Zego has raised $281.7 million to date to off something similar (as regards fleet tracking for insurance), Flock now appears to be in Zego’s rear view mirror. Indeed, insurance behemoths such as AIG and Allianz are likely to be as much competitors in this space today.
Flock has now added to its war chest with a $38 million Series B funding, led by Octopus Ventures (via Octopus partner Malcolm Ferguson), with CommerzVentures. Also participating were existing investors including Social Capital (led by Chamath Palihapitiya), Dig Ventures (the family office of MuleSoft founder Ross Mason), Anthemis and Foresight Ventures. Flock’s Series A was led by Palihapitiya in 2021.
Flock now lays claim to over 600 commercial fleet customers, including Jaguar Land Rover, Europe’s electric car subscription company Onto and a third of the U.K.’s independent Amazon fleets, it says.
Flock says its use of telematics allows customers to understand risk and identify high-risk drivers and routes. This helps them reduce crash frequency by as much as 10%. Thus safer driving is then rewarded with lower insurance premiums.
Klinger, Flock’s CEO, told me on a call: “We’ve grown revenues about 30 times since the Series A. We’ve only recently launched our motor fleet product and we’ve landed about 600 commercial customers. We now insure about one third of the U.K.’s independent Amazon fleets. We’ve also partnered with about 100 commercial insurance brokers in the U.K. and I believe that is one of the core reasons that we were able to raise a Series B.”
The funding round comes at a time when Series B and growth-stage funding rounds are somewhere rarer, which makes Flock’s achievement more notable in terms of the fundamentals of the business and team.
The round will be used to to expand into new segments of the commercial motor industry as well as new geographies.
Malcolm Ferguson, partner, Octopus Ventures, said in “a statement: “Flock has a vision that can make the world safer not just for today’s vehicles but for the connected and autonomous vehicles of tomorrow.”