Commercial Auto Insurtech Fairmatic Raises $42M
Insurtech Fairmatic, founded by Jonathan Matus, a former Android and Facebook mobile executive, announced a $42 million Series A funding round to further expand its investment in the performance-priced fleet insurance market.
Fairmatic started back in May 2018 and did a soft launch, building up its book in the large commercial fleet space. Fairmatic describes its model as behavior-based insurance (BBI) and says it is different than traditional UBI models because it doesn’t rely on dash cam systems and thus is better able to measure what causes bad driving behavior.
Fairmatic’s AI-powered risk and pricing models has been tested and trained with nearly 200 billion miles of driving data and tested over the past five years of operations, demonstrating a proven way to help fleets proactively manage and improve safety issues with actionable insights, the company said in a statement. According to Fairmatic, a simple behavioral shift can result in meaningful cost savings, leading to a more sustainable fleet business with safer drivers, more competitive insurance pricing and lower attrition rates.
Former Allstate President Jamie Trish serves as the company’s president of Insurance.
“Historically, commercial auto insurance has been a losing battle for both insurers and insureds, suffering massive losses and inflated premiums,” said Trish. “Fairmatic is flipping the script by redefining a win-win-win sweet spot where safer fleets get rewarded with saving… Our unique ability to deliver fair and transparent pricing, combined with our proven profitable growth model puts Fairmatic at the apex of Insurtech 2.0.”
“Fairmatic is introducing an impact-driven alternative to antiquated commercial auto insurance models: one that rewards safety and gives fleets fairness and control over costs,” said Matus, founder and CEO. “Having spent years working on making smartphone technology ubiquitous, I was deeply troubled by its unintended consequence for road safety. Fairmatic’s inception is the manifestation of our focus to transform commercial auto insurance into a force for good.”
Matus says that insurance in the commercial auto segment has been extremely unfair.
“Now more than ever, with inflation making things worse, fleets need a fair and transparent insurance option,” said Matus. “Safer fleets should pay less because they’re less risky, but they end up subsidizing unsafe fleets because existing commercial auto insurers use a catch-all pricing algorithm that fails to account for actual and dynamic risk profiles unique to each fleet.”
Fairmatic’s Series A funding round was led by Foundation Capital, along with Aquiline Technology Growth. The company is also backed by insurtech, fintech and technology industry angel investors, including Yahoo co-founder Jerry Yang; Israeli-American investor and Forbes Midas List 2022 one-man VC Oren Zeev; Hippo Insurance co-founder Assaf Wand; entrepreneur and multiple unicorn investor Bill Tai.
“Raising such a substantial Series A in the current economic climate is testament to the opportunity Fairmatic has and to its proven track record while in stealth mode, which we only expect to continue on an exponential trajectory,” said Foundation Capital’s Charles Moldow, who also joined the Fairmatic board. “With a total addressable market of $160 billion, the commercial insurance category is ripe for a refresh. Fairmatic offers new ways for fleets to derive the same technology-based cost savings and benefits that consumers have enjoyed for years.”
Alongside Trish and Matus, Fairmatic’s c-suite also includes Ed Ford, former Chief Actuary of Progressive Insurance, and Brian Specht who led partnership growth at cybersecurity insurtech unicorn Coalition.
Fairmatic says it is ramping up to grow its global team with hubs in the U.S., Israel and India.