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Contxto – Crabi, a Mexican insurtech startup “humanizing the insurance industry,” recently raised US$1.3 million in a successful seed round. Stocked and loaded, now the platform intends to steadily scale operations.
We reached out to Redwood Ventures to find out more about this new deal, and here’s what they told us.
The AI-powered startup that predicts driver behavior raised its first series from various investors. Redwood Ventures set the terms for the investment, though it was led by an undisclosed Family Office. Other individual angel investors also contributed.
“We are confident that Crabi will be the leader in digital innovation in car insurance in Mexico and the world. This industry is ready for a change and we are excited to invest in a team that has the experience, vision and drive to offer best results. We hope to grow together with Crabi and help them expand their presence in Mexico,” said Ian Paul Otero, General Partner of Guadalajara’s fund, Redwood Ventures.
With its “Fair Drive” model, Crabi is leaping into the digital era with its transparent and personalized auto insurance plans based on one’s driving records. Its mobile application also integrates contracts without intermediaries or direct communication.
What makes the company really stand out is how it rewards responsible drivers with better rates, allowing them to benefit from responsible driving habits. This is achieved through sensor readings and data interpretation from Machine Learning.
Recently, the National Commission of Insurance and Finances authorized Crabi to operate as an insurance institution for automobile damage claims. Based on this, the company will also start issuing 100 percent digital policies during the second quarter of 2019.
This round represents Redwood’s sixth investment to date. At the same time, it’s the fund’s third fintech-related investment.
Insurtech is certainly becoming a worldwide trend and increasingly more prosperous. Although industry startups saw a 37 percent spike in funding from 2014 to 2017 globally, Latin America’s ecosystem is once again lagging behind.
Not for long, though. Similar to what’s happening with traditional banking and challenger banks, the insurance industry will inevitably go through some drastic changes. Slowly but surely.
Old school insurance companies may not disappear overnight, but they will surely merge services and partner to decrease costs as well as increase efficiency. Based on the competition from tech companies satisfying customers more easily and effectively, revisions will be necessary.