Things like your credit score, income tier, and education level make up the majority of your price. Layer in a global pandemic, record unemployment numbers, and a generation of more social-justice oriented consumers, and you have a major industry challenger waiting to be founded. Enter LOOP. An insurance company suited for the new world we’re living in. Founded by serial entrepreneur John Henry and MIT alum Carey Anne Nadeau, LOOP was formed as a Public-Benefit Corporation so that ‘mission’ would be in its founding DNA. Their goal? Create fair insurance for all using a completely technology-driven way to price, engage, and insure customers. Today this approach is saving everyday people an average of 35% on their car insurance premiums.
The duo have landed on an opportunity that feels obvious in hindsight: a next-generation car insurance company that looks, feels, and runs just like the top tech solutions we’ve come to expect from almost every other industry. They lean into social media vs traditional TV advertisements, insure only through a mobile app vs a retail space, and use modern trends like NFTs and Clubhouse to build what they claim is “community-powered growth”. In the last 9 months alone, LOOP has grown a waitlist of over 30,000 people waiting to ride with, and be insured by, what many see as a better way to do car insurance.
In an effort to build an upstart brand that can successfully challenge incumbents in a capital-intensive market, LOOP has had to raise big money. In January of this year, they closed a $3.25 million Seed round. This week, LOOP has announced a $21 million Series A round led by Foundry Group and 01 Advisors; making it one of the largest ever by a founder of color or female founder. The round includes participation from rap icon and avid angel investor Nas, to media companies like Earn Your Leisure, and top institutional VCs like Freestyle, Uprising Ventures, Backstage Capital and Concrete Rose.
Henry feels LOOP was made for this moment in time. “Our generation is done waiting for others to create change. Our community demands equity, representation, honesty, and transparency in financial services. What we’re proving is that being rooted in values isn’t a nice to have — it’s a consumer demand.” said Henry.
“There are a confluence of factors that make LOOP uniquely possible in this moment.” Added Nadeau. “From consumer sentiment, to technological advancements, and the current state of capital markets flowing to diverse founders. This is the time to build a category-defining company and brand.”
While the duo does not believe the demand for more equitable insurance will diminish, LOOP recognizes the potential regulatory hurdles ahead of them. The US auto insurance industry is a whopping $256 billion annual industry, and has one of the fiercest lobbies to keep the status quo in place.
“Innovation will not be stopped,” says Henry in response to potential opposition. “This is bigger than any one company. These are the reflections of a new generation of consumers. Ask the Taxi and Limousine Commission how it worked out for them to stifle Uber. We are not the arbiters of truth: the market is. And the market is speaking.”
Henry and Nadeau’s vision for LOOP is to build the most honest and transparent financial services company in the world. They claim they are “not interested in an acquisition price, but a listing price”, hinting at ambitions of taking the company public in the future. Whether they will grow faster than incumbents can adapt only time will tell, but one thing is for sure — LOOP has a shot at changing the insurance industry for good.
