Selling alternative telematics with Driver Technologies
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What
Driver Technologies is a New York-based startup providing a mobile app for safer driving. Users can record their trip, receive alerts when they’re at risk of hitting an object or person, drifting out of their lane, or being distracted. Founded in 2018, Driver most recently raised a $8 million Series A in 2021, with funding from IA Capital, Liberty Mutual Strategic Ventures, State Auto Labs/Rev 1, The Social Entrepreneurs' Fund, C2Ventures, and Kapor Capital.
Why
According to Rashid Galadanci, Driver’s CEO and Co-Founder, the company fills a needed niche between competing forces. On the one hand are insurance companies, which have invested heavily in telematics as a way to mitigate risks, reduce costs, and gather data on consumers. On the other hand are consumers, who have been hesitant to buy into telematic-centric insurance plans due to privacy concerns. The Driver app lets consumers opt into the kinds of data they share with insurance companies—their driving score but not their location, or video feed, for example—offering both consumer agency as well as data-driven insurance discounts.
Galadanci thinks 2023 will be particularly decisive for the insurance industry. “The ethos of grow, grow, grow, is coming home to roost, and so for up and coming insurance companies, that’s going to be painful, because they don’t have the reserves to weather a storm,” Galadanci said. That might force smaller players out of business, leading to market consolidation—as well as greater business-side openness to new technologies.
How
On the consumer side, Driver emphasizes the cost-accessibility of its app. While dashboard cameras can be expensive, the smartphone-based platform uses existing technology that most people have; and consumers can use the free version of the app as well. Highlighting the opportunity for drivers to choose what kinds of data they share with insurers has been an added unique selling point. “You have all this stuff that basically mitigates all those privacy concerns while unlocking the kind of product opportunity to get savings or protect a fleet or family,” Galadanci said.
On the insurer side, carriers are generally willing to forego total control—that is, the aspiration to provide their own full-fledged telematic devices—in exchange for lower-risk customers. If a carrier doesn’t already have a tie-up with Driver, then the startup can reach out to carriers and advocate on consumers’ behalf. “Because the insurance industry is not the quickest industry, we're slowly adding more insurers to our platform,” Galadanci said.
Galadanci doesn’t anticipate quicker business-side sales pipelines, as insurance companies are risk-averse, and do their own data validation and security tests before accepting third-party data providers like Driver. “I’m really excited to get the seal of approval from major insurers that our data looks like existing big-name telematics providers,” Galadanci said.
