Loop, a B-Corp auto insurance MGA, has raised $3.25m in seed funding led by venture capital firm Freestyle VC.
Freestyle was joined by Blue Fog Capital, Fontinalis Capital Partners, Concrete Rose, Uprising Ventures, and Backstage Capital in the fundraising.
Also joining the funding round were angel investors including Kristen Dickey, Steve Schlafman, Songe LaRon, Craig Lewis, Gerard Adams, and Joshua Dorkin.
Loop was co-founded by John Henry and Carey Anne Nadeau in July last year.
Nadeau has previously been a researcher at the Brookings Institution, and was the founder/CEO of predictive-modelling firm Ometry. Henry cofounded diversity-focused VC firm Harlem Capital and was the founder/CEO of Mobile City.
Blue Fog Capital managing partner Harris Brody said: “The size of this market combined with the community-first ethos has the potential to build a movement.
“We are thrilled to join Loop in making a difference in the lives of so many who are disadvantaged by legacy auto insurance models. This founding team is proven and uniquely combines Carey Anne’s deep technical and domain expertise with John’s go to market talents.”
Loop believes that the auto insurance sector offers structural bias against vulnerable communities heavily by pricing customers on demographic factors such as credit score and zip code.
The firm, which uses AI, big data, and telematics, says that its AI-driven approach to pricing to measure road safety and their customers driving behaviour prices customers more equitably.
Usage-based insurance (UBI) programmes such as Loop are said to be the fastest growing segment in the auto insurance sector that represents a $256bn annual market.
Henry stated: “We believe there’s a large market opportunity in pricing people more fairly and building a community-first brand in the auto insurance space.”