Driveway software have successfully turned to Ervington Investments to raise $10 million in a Series A funding round. This is not the first travel investment made by Ervington Investments as they also backed Via, the car sharing mobile app based in New York back in April 2015.
Driveway Software was founded in 2010 by Jake Diner, Senior Advisor and Igor Katsman, CEO. There have been two rounds of seed funding prior to this first full round led by Roman Abramovitch’s Ervington Invetsments investment vehicle. Driveway Software announced that they would be using the money to expand its telematics solution into other markets and fund growth.
The last seed round was in August 2013 when $1.3 was raised from AltaIR Capital, IMI.VC, and Kernel Capital.
Telematics for car insurance now…
The Driveway solution works on both Android and iPhone and does not require the installation of a black box like other OBD (On Board Diagnostics ) solutions for UBI (User Based Insurance). This has allowed them to enhance the experience for drivers, delivering limited gamification of driving. Drivers are able to view all the statistics around their driving and receive a scoring that they can seek to improve.
The use of Big Data and cloud analytics can feed information to insurers who are then able to offer tailored insurance to drivers. This will be good news for some drivers as it allows insurance companies to compete with each other offering discounted rates for those drivers. The down side is that it will increase the rates for those drivers not using UBI. This will reach a point in time where the better drivers will all be using UBI, while the rest are likely to be lumped into a more expensive bracket. In other words insurance costs may increase.
The upside of the Driveway software app is that drivers will be able to tell how well they are driving and possibly improve their rating over a period, thus one would hope lower their insurance costs. There is one drawback with this solution and it is without the direct connection to a car one would never know whether the driver always takes their mobile phone with them, or that it is switched on.
Igor Katsman, Founder of Driveway commenting on what Driveway Software has achieved said “Since we launched five years ago, our smartphone app, Drivewise.ly, has collected over 500,000,000 miles and rewarded more than 250,000 drivers.
“In that time, we have worked with many great companies such as Pinnacle Actuarial Resources, AmWins and Deloitte to make roads safer and help drivers save money on gas and auto-insurance. The new funding is a recognition that mobile telematics is becoming a ubiquitous part of our everyday lives. Our state-of-the-art technology has removed the barriers that existed with legacy telematics solutions. Customers can be engaged like never before, with resulting big data yielding unprecedented levels of actionable insights.”
It is interesting that Driveway has indicated in the release that it will be investigating new markets. They have been collecting and analysing data successfully with their existing solution and one wonders what the next market will be. The obvious target will be fitness and health although this market is saturated, fleet management might be another avenue, but one would expect them to forge an alliance in this area as there are already established players.
The solution is currently only available in the US, but if they are able to woo a significant global insurer perhaps they will be able to internationalise their market reach.