Atlanta insurance technology startup Mile Auto raised a $10.3 million seed round and scored another partnership with a major automaker.
The round included investments from California-based Ulu Ventures, Emergent Ventures and Sure Ventures, and Louisville, Ky.-based Thornton Capital.
Mile Auto uses computer vision and machine learning to provide car insurance to low-mileage drivers. Drivers take a picture of their odometer each month, which is uploaded into Mile Auto’s database. The startup charges for insurance based on the number of miles people drive.
Mile Auto CEO Fred Blumer said the startup becomes competitive with other insurance policies when people drive less than 10,000 miles per year, which usually means they have little to no daily commute.
Mile Auto launched through Georgia Tech’s startup incubator ATDC and still has its headquarters in Tech Square. A partnership with Porsche Financial Services helped get the company off the ground, Blumer said.
Before being released to the public, Mile Auto worked with Porsche to provide auto insurance specifically for its customers. Porsche’s Atlanta location helped inspire the deal, Blumer said, and the state has been a helpful home base because of its various auto facilities.
Now, Mile Auto is partnering with Ford Motor Co. (NYSE: F) to offer the automaker’s connected vehicle customers low-mileage savings. That feature should launch later this year, Blumer said.
With the seed round, Blumer plans to double his 16-person team, keeping most of the operations in Atlanta. The startup is in four states right now, including Georgia, and plans to expand into more this year. Two new states will go live in the next six weeks, Blumer said.
A $10.3 million round is much larger than the average seed round for Atlanta startups, which usually raise around $1 million for that stage. It could indicate the growing strength of Atlanta’s innovation ecosystem and the opportunity the startup has for disrupting the auto insurance industry.
Blumer said that capital also allows the startup to attract the best talent in the industry.
Blumer, who worked on State Farm’s Drive Safe & Save program, founded Mile Auto in 2019 after having concerns with how auto insurance companies monitored and charged drivers.
The Drive Safe & Save program collects annual mileage data as well as driving characteristics, which includes when, where and how fast a person drives, according to the State Farm website. A State Farm spokesperson said the personalization in the voluntary program saves drivers money. Progressive's Snapshot program collects similar data.
Blumer finds this amount of data an invasion of privacy.
"They track everything you do,” Blumer said of the hardware devices that go with those programs. “But underlying all that intrusive data were just miles driven.”
Plus, Blumer said low-mileage drivers often subsidize coverage for high-mileage drivers for auto insurance companies, so they pay high prices for coverage they don’t need. Mile Auto attempts to fix that.
The insurance tech startup is Blumer's latest venture in the automotive technology space. He co-founded Hughes Telematics, which was acquired by Verizon Connect, and Vehcon, which is a connected vehicle data company.
