Fintech

Meet Lula, a startup that aims to be the ‘Stripe for insurance’ and just raised $35.5M

Comment

Lula raises $35.5M to be the 'Stripe of insurance'
Image Credits: Lula

Lula, a startup which aims to be the “Stripe for insurance,” has raised $35.5 million in a Series B funding round after experiencing a massive surge in customers.

When TechCrunch reported on Lula’s $18 million Series A raise in July of 2021, the company was focused on building an insurance API that aimed to “eliminate the need for companies to build their own insurance infrastructure.” Over time, Lula’s offering has evolved into a broader insurance offering that is designed to help companies reduce insurance premiums and insurance-related expenses for businesses. Lula now offers a range of tools, including risk management, claims management, policy management and access to insurance coverage.

The move appears to have been a smart one for the Miami-based company, which says its customer base has grown significantly — from 99 businesses in February of 2022 to nearly 4,000 as of July. While Lula declined to reveal hard revenue figures, co-founder and president Michael Vega-Sanz told TechCrunch that monthly revenue has multiplied by 20 times since February 2022. 

“The capital is going to get us to profitability in the next couple of quarters,” he said. “We expect to pass $100 million in annual recurring revenue over the next three to four quarters.”  

Image Credits: Co-founders Matthew and Michael Vega-Sanz / Mariapaz Forlong / Forlong Photography

Currently, Lula works with car rental, trucking and logistic companies, as well as car-sharing platforms. Customers and partners include Kyte, Turo and State National.

In May, the company launched a product for the trucking industry. Historically, truckers have been required to pay for 365 days a year of coverage, even if they are actually on the road for a fraction of the year. Lula touts that its offering gives trucking companies a way to pay for coverage for only when their trucks are actually on the road. Additionally, Lula’s API provides owner-operators with tools to vet drivers, do driver history checks, organize policies and manage claims. 

The startup’s massive customer and revenue growth helped Lula increase its valuation by 5x compared to its 2021 raise, according to Vega-Sanz, who started the company in early 2020 with his twin brother, Matthew. He declined to share the exact amount but noted that Lula was able to raise the funds in a matter of weeks.

NextView Ventures and Khosla Ventures co-led the financing, which included participation from Founders Fund, Financial Technology Partners founder and managing partner Steve McLaughlin, Steve Pagliuca, co-chair of Bain Capital and co-owner of the Boston Celtics, and Nextera Energy.

The company plans to use its new capital in part to expand outside of the “wheels” space into industries such as logistics, while also continuing to expand its offerings. One way it plans to broaden its scope is to move into embedded insurance, he said.

Focus on capital efficiency

Vega-Sanz believes the company was able to raise capital fairly quickly, and at a higher valuation, because it worked very hard to be capital efficient over the past two years.

“In late 2021 and early 2022, there was way too much capital out there, and we were reaching the peak of a very bullish market,” he recalls. “We knew we needed to raise a series B but also that the market was likely going to go down significantly.”

So in preparation, the 115-person startup focused on capital efficiency and unit economics “well in advance” of its Series B raise. It was not an easy thing to do, he admits, when other companies were still offering overinflated salaries and exorbitant bonuses. In the end, though, Vega-Sanz thinks Lula was able to still attract quality employees because of its frugal mentality compared to other more lavishly-spending companies.

“When we talk to potential company executives or potential leadership or managers or just software engineers that are accustomed to these extremely high salaries, we don’t necessarily offer them what they’re accustomed to in terms of a compensation package,” Vega-Sanz admits. “And surprisingly, a lot of senior leadership appreciate coming into a company or a business that is not going to have to be in a position to raise capital in 12, 18 or 24 months and potentially take a down round.”

“They seem to really appreciate being part of a business where they don’t have to worry about in a few months if things really hit the fan that we’re going to have to go through company-wide layoffs,” he added.

Lula’s cost-conscious mindset only strengthened the confidence of Lee Hower, a lead and early investor in Lula and founding partner at NextView Ventures.

“I think what Lula is doing in terms of being an insurance-focused software platform and serving a particular kind of customer stands out because there aren’t 20 other companies doing exactly what they’re doing,” he told TechCrunch in an interview. “The tech and software infrastructure for businesses… hasn’t really advanced in decades. So little is focused on building tools that help businesses acquire coverage, better assess their risk manager and utilize their coverage in more effective ways. So, in the same way that you’ve seen multiple public companies building software for carriers and reinsurers, I think, Lula has a great shot at being a software technology provider to businesses as the consumers of insurance.”

Want more fintech news in your inbox? Sign up for The Interchange here.

More TechCrunch

Meta’s Oversight Board has now extended its scope to include the company’s newest platform, Instagram Threads, and has begun hearing cases from Threads.

Meta’s Oversight Board takes its first Threads case

The company says it’s refocusing and prioritizing fewer initiatives that will have the biggest impact on customers and add value to the business.

SeekOut, a recruiting startup last valued at $1.2 billion, lays off 30% of its workforce

The U.K.’s self-proclaimed “world-leading” regulations for self-driving cars are now official, after the Automated Vehicles (AV) Act received royal assent — the final rubber stamp any legislation must go through…

UK’s autonomous vehicle legislation becomes law, paving the way for first driverless cars by 2026

ChatGPT, OpenAI’s text-generating AI chatbot, has taken the world by storm. What started as a tool to hyper-charge productivity through writing essays and code with short text prompts has evolved…

ChatGPT: Everything you need to know about the AI-powered chatbot

SoLo Funds CEO Travis Holoway: “Regulators seem driven by press releases when they should be motivated by true consumer protection and empowering equitable solutions.”

Fintech lender SoLo Funds is being sued again by the government over its lending practices

Hard tech startups generate a lot of buzz, but there’s a growing cohort of companies building digital tools squarely focused on making hard tech development faster, more efficient and —…

Rollup wants to be the hardware engineer’s workhorse

TechCrunch Disrupt 2024 is not just about groundbreaking innovations, insightful panels, and visionary speakers — it’s also about listening to YOU, the audience, and what you feel is top of…

Disrupt Audience Choice vote closes Friday

Google says the new SDK would help Google expand on its core mission of connecting the right audience to the right content at the right time.

Google is launching a new Android feature to drive users back into their installed apps

Jolla has taken the official wraps off the first version of its personal server-based AI assistant in the making. The reborn startup is building a privacy-focused AI device — aka…

Jolla debuts privacy-focused AI hardware

OpenAI is removing one of the voices used by ChatGPT after users found that it sounded similar to Scarlett Johansson, the company announced on Monday. The voice, called Sky, is…

OpenAI to remove ChatGPT’s Scarlett Johansson-like voice

The ChatGPT mobile app’s net revenue first jumped 22% on the day of the GPT-4o launch and continued to grow in the following days.

ChatGPT’s mobile app revenue saw its biggest spike yet following GPT-4o launch

Dating app maker Bumble has acquired Geneva, an online platform built around forming real-world groups and clubs. The company said that the deal is designed to help it expand its…

Bumble buys community building app Geneva to expand further into friendships

CyberArk — one of the army of larger security companies founded out of Israel — is acquiring Venafi, a specialist in machine identity, for $1.54 billion. 

CyberArk snaps up Venafi for $1.54B to ramp up in machine-to-machine security

Founder-market fit is one of the most crucial factors in a startup’s success, and operators (someone involved in the day-to-day operations of a startup) turned founders have an almost unfair advantage…

OpenseedVC, which backs operators in Africa and Europe starting their companies, reaches first close of $10M fund

A Singapore High Court has effectively approved Pine Labs’ request to shift its operations to India.

Pine Labs gets Singapore court approval to shift base to India

The AI Safety Institute, a U.K. body that aims to assess and address risks in AI platforms, has said it will open a second location in San Francisco. 

UK opens office in San Francisco to tackle AI risk

Companies are always looking for an edge, and searching for ways to encourage their employees to innovate. One way to do that is by running an internal hackathon around a…

Why companies are turning to internal hackathons

Featured Article

I’m rooting for Melinda French Gates to fix tech’s broken ‘brilliant jerk’ culture

Women in tech still face a shocking level of mistreatment at work. Melinda French Gates is one of the few working to change that.

1 day ago
I’m rooting for Melinda French Gates to fix tech’s  broken ‘brilliant jerk’ culture

Blue Origin has successfully completed its NS-25 mission, resuming crewed flights for the first time in nearly two years. The mission brought six tourist crew members to the edge of…

Blue Origin successfully launches its first crewed mission since 2022

Creative Artists Agency (CAA), one of the top entertainment and sports talent agencies, is hoping to be at the forefront of AI protection services for celebrities in Hollywood. With many…

Hollywood agency CAA aims to help stars manage their own AI likenesses

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine