Fairmatic raises $46 million in latest funding round | Insurance Business America
Commercial auto insurance company Fairmatic has announced that it has raised $46 million in new funding, six months after its oversubscribed Series A funding round.
The new funding brings Fairmatic’s total financing to $88 million. Battery Ventures led the round, with participation from current investors and Bridge Bank.
Fairmatic uses an AI-driven underwriting approach to offer continuous savings for commercial fleets. The company provides a simple way to monitor driving events and offers actionable improvement tips, giving fleets more control over their risk management approach.
The company incentivizes safer driving and does not penalize fleets for unavoidable incidents. This differs from traditional insurance models that rely on historical data, which has led to losses and overpriced premiums, especially upon renewal, Fairmatic said.
“Fairmatic addresses the central requirement of improving commercial auto insurance: motivating safer driving,” said Marcus Ryu, Battery Ventures partner and co-founder and former CEO of insurtech Guidewire Software. “The company does so by capturing the rich data signal generated by our smartphones and applying it to the task of identifying unsafe driver behavior, which enables Fairmatic to offer insurance products that both reward fleet managers for safer driving and potentially achieve greater profitability than traditional, loss-based approaches to underwriting and pricing.
“We are excited to partner with Fairmatic as an exemplar of fundamental innovation in financial services,” Ryu said. “Fulfillment of the company’s mission will entail more than just convenience and lower insurance costs for their customers; it will enhance the safety of the roads we all rely upon every day.”
Read next: What’s next for commercial auto risk in 2023?
“New developments in AI, combined with troves of proprietary driving insights, have allowed Fairmatic to unlock a completely new approach to addressing the most critical questions in commercial auto insurance: which drivers are safe and which aren’t; how insurers can help drivers improve safety and reduce risk,” said Jonathan Matus, founder and CEO of Fairmatic. “With this powerful new technology for improving driver behavior, there’s a massive opportunity to reframe the problem and solution from first principles. This new funding strengthens Fairmatic’s lead in AI innovation geared towards meaningfully improved road safety and profitability.”
With the new funding, Fairmatic is scaling its AI and data-science capabilities by opening a new research and development hub in Israel and tapping former NASA researcher Guy Shaviv as the new head of engineering in Israel.
“Israel has some of the world’s finest talent for both insurtech and mobility,” Shaviv said. “Folks here are creative, smart and aggressive – exactly what a startup at our stage needs.”
Have something to say about this story? Let us know in the comments below.