LOOP Raises $ 21 Million For Sequence A To Make Auto Insurance Extra Honest – Forbes
Loop co-founders John Henry and Carey Anne Nadeau
Today the auto insurance industry is full of prejudice; Prices for things that many would say have little or nothing to do with their driving. Things like your creditworthiness, income level, and education level make up the bulk of your price. In a global pandemic, record unemployment rates, and a generation of consumers more social justice centric, you have a huge industry challenger waiting to be created. Enter LOOP. An insurance company suitable for the new world we live in. Founded by serial entrepreneur John Henry and MIT alum Carey Anne Nadeau, LOOP was founded as a non-profit organization so that the “mission” is anchored in their founding DNA. Your goal? Create fair insurance for everyone by using a fully technology-driven method of pricing, engaging and insuring customers. Today, this approach saves ordinary people an average of 35% of their car insurance premiums.
The duo found an opportunity that, in hindsight, feels obvious: a next-generation auto insurance company that looks, feels, and works just like the top tech solutions we've come to expect from almost every other industry. They rely on social media vs. traditional TV advertising, insure themselves only via a mobile app vs. a sales area, and use modern trends such as NFTs and clubhouse to build community-driven growth. In the past 9 months alone, LOOP has built a waiting list of over 30,000 people waiting to ride and be insured, which many see as a better way to get car insurance.
In order to build an emerging brand that can successfully challenge established companies in a capital-intensive market, LOOP had to raise a lot of money. In January of this year, they completed a $ 3.25 million seed round. This week, LOOP announced a $ 21 million Series A Round led by Foundry Group and 01 Advisors; This makes it one of the largest ever made by a color founder or female founder. The round includes the participation of 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 that LOOP is made for this moment. “Our generation is fed up with waiting for others to bring about change. Our community demands justice, representation, honesty and transparency in financial services. What we are proving is that being rooted in values is not a nice-to-have – it is a consumer demand, ”said Heinrich.
“There is a confluence of factors that make LOOP uniquely possible at this moment.” Nadeau added. “From consumer sentiment to technological progress and the current state of the capital markets flows to various founders. This is the time to build a category-defining company and brand. "
While the duo doesn't believe the demand for more equitable insurance will decline, LOOP recognizes the potential regulatory hurdles that lie ahead. The U.S. auto insurance industry is a whopping $ 256 billion a year and has one of the toughest lobbies for maintaining the status quo.
"Innovations are not stopped," says Henry in response to possible resistance. “That is bigger than any single company. These are the reflections of a new generation of consumers. Ask the Taxi and Limousine Commission how they managed to suffocate Uber. We are not the referees of the truth: it is the market. 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 claim to be "interested in a list price, not a purchase price," which suggests ambitions to get the company public in the future. Time will tell whether they will grow faster than established companies can adapt, but one thing is certain: LOOP has the opportunity to change the insurance industry in the long term.