Nirvana Insurance — an insurance startup taking a new approach to insurance products for commercial fleets using artificial intelligence, telematics, internet-of-things technology and 15 billion miles of trucking data to calculate risk models — is taking on something else: new funding.
The startup has raised an all-equity Series B of $57 million, money that it will be using to continue expanding its big data platform, for hiring and to continue growing its business, which is initially targeting the trucking industry. The funding comes on the heels of seeing its business grow 30-fold since launching in 2022.
Lightspeed Venture Partners is leading the round, with General Catalyst and Valor Equity Partners also participating. We understand that the round doubles the company’s valuation to more than $350 million post-money.
The problem that Nirvana is aiming to solve is that for the most part, fleets of trucks are run as small businesses with very thin margins.
“Ninety percent of fleets have less than 50 trucks,” Rushil Goel, the CEO and co-founder of San Francisco-based Nirvana, said in an interview. With rising fuel costs, he added, “they are really struggling to stay alive.”
Add to that the mandatory headache of insurance. Typically, insurance can cost $15,000-$20,000 annually per vehicle, a rate that is on the rise, he said. On top of that, getting quotes and policies sorted out can often take weeks, and filing and getting claims paid out can keep drivers off the road for weeks.
Nirvana’s solution aims to speed up activity across all those different areas: faster quotes, at rates that are right-sized to the customer in question, with better tools to claim against the policy if needed.
It does this by way of tapping into the many sensors that are already built into trucks, using the data amassed from them to build new models for pricing.
“We leverage billions of data points from sensors on trucks to build risk models,” Goel said. “No one else is doing this.”
A typical truck might look more cumbersome and basic on first glance to the average consumer, but in fact there is a growing trend for more technology in these vehicles that is not unlike the developments underway in the consumer automotive space.
A federal mandate in 2017 required all trucks to have electronic logging devices installed. New vehicles are equipped with these, and in the U.S. the number of heavy trucks now with these numbers 18-20 million, he estimated, with the global number much bigger; and in the lighter truck market, those devices are in about 30-40% of all vehicles. Typically, used trucks in both categories get retrofitted, or are swapped out on an average of a 10- to 15-year refreshment cycle. All this points to a definite market today, plus one that is growing.
“There is a wave of IoT adoption in the trucking space,” Goel said.
Alongside its risk models, Nirvana has also built tools for its customers to both file and make claims using images and other data from dashboard cameras.
Sensors and cameras these days on trucks are able to pick up a number of characteristics in the game of driving: do drivers brake too hard, do they signal before changing lanes, are they floating between lanes a lot, are they using their horn a lot and where are they honking?
Goel said that the data it collects from these cameras and sensors is adequate enough that it’s built an AI based on it that helps calculate premiums for its customers; those whose driving Nirvana’s AI deems “safe” can get discounts of up to 20%.
“Commercial fleets today produce a tremendous amount of data, yet most insurers still insist on a cookie-cutter approach to insurance that does nothing to incentivize safety. Nirvana is bringing insurance into the modern era, changing how the industry considers risk,” said Raviraj Jain, a partner at Lightspeed Venture Partners, in a statement. “Their incredible growth is a testament to the opportunities AI and data analytics are opening up in fleet insurance and beyond, especially given that the IoT fleet management market is expected to continue growing.”
Updated to correct the pricing of insurance per vehicle.