By Nancy Dahlberg
Even the name of this insurance-technology startup signals you are going to find something different here. Lula for an insurance company?
But there’s nothing traditional about Lula, the Miami-based startup on a mission to eliminate the pain points and inefficiencies that have long plagued the insurance industry. In its three short years of life, the company founded by Miami-born twin brothers Matthew and Michael Vega-Sanz has experienced explosive growth and now the co-founders have bagged another round of venture funding.
Lula announced today that it has raised a Series B round of $35.5 million. The round was led by NextView Ventures and Khosla Ventures, with participation from Founders Fund, Steve McLaughlin, founder and managing partner of Financial Technology Partners, Steve Pagliuca, co-chair of Bain Capital and co-owner of the Boston Celtics, and NextEra Energy. Nearly all are existing investors who have doubled down following Lula’s $18 million Series A round just two years ago.
In the past year, Lula has evolved from an API-based solution into a comprehensive insurance platform that aims to reduce insurance premiums and related expenses for businesses. Mainly serving car rental, trucking and car sharing platforms at this time, the platform offers a wide range of tools, including risk management, claims management, policy management, and access to insurance coverage.
“We are providing not only an abundance of different tools but now offering access to a network of insurance carriers,” explained Matthew Vega-Sanz, CEO, in an interview with Refresh Miami. “We’ve shown that this type of platform approach can really work.”
“We’ve grown the business by almost 40x in the past 15 months,” he continued. “We went from having a couple of dozen customers to now having thousands of customers that are using this on a daily basis, and we’ve been able to experience that growth without having to spend irresponsibly, which is probably what I’m most proud of.”
Lula began hyper-focused in the car-rental space, and realized that its technology can be utilized to manage other types of insurance, such as for trucking businesses. This year it rolled out its pay-per-day trucking solution that allows trucking companies to pay only for the days their trucks are on the road. Lula is also now focused on shared-mobility players like Kyte, Matthew said. “We’ll get in early and then as they grow obviously, our business grows as well.”
Lula serves about 4,000 companies now and its team has grown from around 15 people in the summer of 2021 to about 50 a year ago and 114 people currently.
Lula actually spun out of a forced pandemic pivot. The brothers dropped out of Babson to build and grow a college car-sharing service, Lula Rides, although they were never able to raise capital. When their startup died early in the pandemic, they found widespread interest in an insurance API they had developed for that car-sharing business that served the riskiest demographic. Their strategy for their new company would be focused on insurance infrastructure.
That was enough to persuade Lee Hower, founding partner of NextView Ventures, to be the first investor to put a bet down on Lula in 2020, accepting the co-founders into NextView’s accelerator when they barely had a concept beyond “we want to be the Stripe for insurance” and then providing seed funding. But Hower already knew the founders and were very impressed, just not with their previous venture. Now the Vega-Sanz brothers had a scalable insurtech concept that Hower and the NextView Ventures team believed had a great deal of potential.
“For us it was an easy yes, even though it was concept stage back then,” Hower, who also invested in Lula’s Series A, said in an interview with Refresh Miami. “Fast forward to today, and their business has grown tremendously. They’re doing tens of millions in revenue, they’re serving thousands of customers and have built a really impressive team as well. This is a startup that’s been firing on all cylinders and exceeding expectations year over year.”
Today, Lula’s insurance platform provides essential infrastructure for managing insurance-related operations, including solutions for customer vetting, fraud detection, driver history checks, policy management, and claims handling.
Lula’s new funding will be used to grow out its product and growth teams and continually make product improvements, Mathew said. “Anything involving insurance is typically such a bad experience for customers and we want to be the first company that gives them something to smile about when they think about insurance, whether it be our processes or the types of products they can purchase from our platform.”
Next will be expanding into new markets beyond commercial auto, shared monility and trucking to offerings for logistics, such as insurance for shipping containers, and embedded insurance that will make insurance available on different transactions.
Lula is hiring specialists over generalists, Matthew said. Executive hires include Rachana Desai, VP of Engineering/Product and a former executive at Twilio, Matt Kennedy, VP of Sales who led sales at Divvy, BetterUp and other companies, and Stephan Chang, VP of Marketing and formerly with Upwork and Skype.
In addition to Lula’s Miami office, located near Dadeland in Kendall, Lula has a hub office in Palo Alto, the same space that once housed PayPal, Google and a number of other companies. Hower, an early employee at PayPal, even worked out of that office more than 20 years ago. Lula is also opening a hub office in Salt Lake City.
“We’re not going crazy. We’re getting the cheapest subleases we can find,” Matthew said. “We’ve just seen that it makes so much sense for the team. People want to be around other people. Team members that spend more time in office outperform the ones that don’t go into the office as much.”
In Miami, Lula is looking to hire in business development, sales and operations. The startup is always looking for engineers, of course, but Lula is mainly finding that talent in other places so far, Matthew said. “For engineering talent, Miami hasn’t caught up to the West Coast yet, key word yet. I think we will.”
‘Personal commitment’ to Miami
Miami will always be Lula’s HQ. “Miami has obviously had a pretty interesting rise as a tech hub in the last couple of years and nowadays it’s a very desirable place for a lot of people to move from New York or San Francisco or other parts of the country to go build their company there. But Michael and Matthew started building in Miami before it was cool, so to speak, and they did it out of a personal commitment,” Hower said.
Matthew and Michael say they are proud of their homegrown roots. They grew up on their family’s farm in Kendall, far from the world of tech, and became immersed in the tech startup world in Boston while attending Babson, catching the startup bug and then moving back to the Miami area.
“I remember people telling us that we will never be able to build a generational business here in Miami and the fact that we get to do it in Kendall, the neighborhood that we grew up in, I think is by far the most surreal piece of this entire thing,” said Matthew. “I just want every little kid in Miami to know that they can build something special in their home.”
Photo at top of post: Co-founders Michael and Matthew Vega-Sanz. Photo by Mariapaz Forlong / Forlong Photography
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