Outdoorsy Inc. has introduced its own insurance-technology business and will be scaling it using $120 million of fresh capital.
The Austin-based, on-demand recreational vehicle rental startup also continues to grow its outdoor-experience offerings with a partnership it announced earlier this month with Denver-based outdoor luxury accommodations company Collective Hotels & Retreats Inc.
The company announced June 24 it had closed the equity and debt financing round.
New York City-based Moore Strategic Ventures led a $90 million private placement equity round, which also included investors ADAR1 Partners, Monashee Capital, SiriusPoint Ltd. (NYSE: SPNT) and Convivialite Ventures. Existing investors Altos Ventures, iAngels and Greenspring Associates also participated.
California-headquartered Pacific Western Bank provided the $30 million debt facility.
The company has raised more than $220 million to date. Outdoorsy in January 2019 closed a $50 million series C round of funding.
Roamly Insurance Group is Outdoorsy’s new insurance division. By offering this type of insurance to its customers, their vehicles are designated as “rent-ready” and they no longer are violating laws that prohibit an RV owner from commercializing the vehicle, said co-founder and CEO Jeff Cavins.
Though regulators have turned a blind eye toward the practice during the past several years — which helped companies like Outdoorsy become viable businesses in the first place — Cavins said they soon will begin cracking down on those skirting the law.
The consequences can be severe, including losing one’s insurance policy, losing any loan tied to the vehicle, losing the ability to obtain new insurance and another loan and a forced loan with expensive terms, Cavins said.
Outdoorsy has been developing its Roamly insurance product for about four years, the CEO said. The beta version launched internally last year before going live in April. Already, Outdoorsy customers may bundle their home and RV insurance, he said.
Because RV users frequently travel across state lines, Cavins said Outdoorsy had to develop Roamly in a way that allowed the company to launch the product in all 50 states simultaneously. The challenges in doing that required the four years it took to develop the first product, he said.
“The challenge is that the insurance industry thinks about RVs as toys, like a jet ski or a snow mobile, but they’re not used that way,” Cavins said. RV owners, for example, must repair physical damage and deterioration due to usage.
A company that suffered from those regulations is San Francisco-based on-demand car-rental company Turo Inc. It is operating again in New York after being banned in 2013 due to such insurance-law violations.
Outdoorsy's insurance division has its own office space at 1300 Guadalupe downtown, Cavins said. Stream Realty Partners Managing Director and Partner Connor Greissing served as the commercial real estate broker. The CEO said that space likely can house roughly 40 people. Overall, Outdoorsy has enough office space for the foreseeable future, he said.
Roamly boasts a staff of 30, most of whom are here in the Texas capital. Some team members are in the San Francisco Bay Area and Boston.
Roamly began being offered in Canada this week, the CEO said. And, he projects that by 2022, the insurance will be offered in Europe. France is likely the first country where it will be offered, he said. Roamly also will be introducing other insurance products in the future.
Bermuda-based global insurance firm SiriusPoint is partnering with Outdoorsy to launch Roamly. Cavins said the firm “did all the underwriting for” the insurance division.
“We are excited to support Roamly and the fast growth the company is experiencing,” Sid Sankaran, SiriusPoint chairman and CEO, said in a statement. “This includes our participation in the company’s equity round and a commercial agreement to support the development of insurance products that serve their customers' needs. Roamly’s market prospects and the speed of the company's growth are global.”
Outdoorsy currently employs 250, 90 of whom are based in Austin, Cavins said. He declined to provide a total for how many workers the business plans to hire during the coming 12 months, but said positions to be filled include those in sales, marketing, operations, engineers and channel executives.
The CEO declined to share revenue figures, but said that the company moves in and out of profitability, depending on the month and the time of year. The summer, for example, is Outdoorsy’s busy season.
Cavins also declined to disclose how many customers the company has, but said that 90% of visitors last year were new to the business.
Outdoorsy and Collective Retreats plan to create several offerings for those “looking for an elevated outdoor accommodation experience,” according to the June 8 announcement.
Co-founded in 2014 by Cavins and Jennifer Young, the company moved its headquarters to Austin from California in 2018. It faces competition from the likes of RVshare LLC, which in October closed a $100 million funding round. Both companies have developed platforms for owners of RVs and campers to rent them out, making extra money from their expensive vehicles.
But the Cavins said he and his colleagues view the competition from a more macro perspective. The company seeks to compete with hotel giants such as Marriott, Hilton and Hyatt. “We’re competing for the entire travel wallet. We’re an aspirational travel brand building out its insurance” technology platform, he said.
Outdoorsy added to its executive team in September, when it announced a 4,500% increase in bookings on its platform since the start of the Covid-19 pandemic.
Cavins is averse to any talk of an exit strategy.
“For me, that’s how you surrender your business,” he said. He pointed to Amazon.com founder Jeff Bezos and Apple founder Steve Jobs as examples.
“There was not a concept of an exit. It’s about domination," he said. "Our goal is to be the most dominant RV company.”
