Pittsburgh-born, but now Austin-based Insurance Zebra, a startup that aggregates car insurance quotes the way that Kayak aggregates flight and hotel deals, is today announcing $1.5 million in seed funding. The round was led by Austin’s Silverton Partners, and includes participation from Mark Cuban, Floodgate, and Birchmere Labs.
Insurance Zebra founder and CEO Adam Lyons worked in the car insurance industry, previously, on both the underwriting and brokerage side of the business. It was an experience that first introduced him to the challenges, and the opportunity, in the market, he says. “If you look at the travel industry a while back, it used to be that you had to go to your travel agent or call the airlines directly, and now there’s all these sites like Orbitz and Kayak. That’s a really similar state to where the auto insurance industry is in the U.S. – you either need to call your insurance agent or call the guy you saw on TV.”
Initially, Lyons said the company’s goal was to just simplify the process of shopping for and buying insurance online. But it soon became clear to him that insurance is something everybody is required to have, but no one fully understands it. People don’t have time to do the proper research and learn all the jargon involved, he says, and they don’t necessarily understand which factors make rates increase or go down.
With the technology Insurance Zebra has developed, the idea is to not only offer real-time quotes via a one-stop shop experience, but also help users visualize how rates change as they step through the online form. The process begins very simply – it only asks for a zip code and car type. But as the consumer fills out more of the form, the quotes becoming increasingly more accurate.
How this is made possible is Insurance Zebra’s secret sauce. The company uses public state filing data as well as data from insurance agencies to help better predict rates. It then combines that data with its own proprietary technology – and a little machine learning and A.I. – to arrival at the quote. When the consumer is ready to buy, Insurance Zebra then facilitates that transaction right on its own website.
The startup has partnership agreements in place with ten major insurance companies so far, but isn’t yet permitted to disclose which ones. These companies, Lyons says, are interested in the volume that Insurance Zebra can deliver, which is why they’re already on board. “While they like the way that we’re bringing transparency to the consumer, at the same time, we help insurance companies get the risks they prefer,” he explains. “The real reason why your rate is different with every company is because different companies prefer different risks.”
Insurance Zebra soft-launched the site in Pennsylvania as an invite-only test with some 10,000 visitors in order to get feedback, and now plans to open up more broadly in around a month or two. Long-term, Lyons wants to offer auto quotes across the U.S., and then move into other verticals in a year to eighteen months, starting with home owners’ insurance.
Now a team of five, soon to be six, Lyons says that the startup has attracted some notable executives from the industry who will be joining the company’s founding team, but he can’t say who these people are yet, as some are still in the process of leaving their current jobs. In the meantime, the site remains behind a sign-up form ahead of its public debut.