A Chicago insuretech startup for the commercial auto industry has raised a new round of funding to expand its service to more states.
High Definition Vehicle Insurance (HDVI), founded in 2018, announced Wednesday that it raised $16 million in a Series A funding round led by 8VC and Munich Re Ventures, with additional participation from Qualcomm Ventures and Autotech Ventures.
The startup makes a tech-based insurance service for trucking fleets that advertises itself as cheaper than traditional insurance models, while also helping its clients improve safety, compliance and operations.
Many tech-forward, personal auto insurance products have been launched by startups like Chicago-based Clearcover and Snapsheet, but the commercial trucking insurance industry has largely been stagnant, according to HDVI’s founders.
HDVI was founded by Reid Spitz, who previously worked at 8VC, and Chuck Wallace, who is also the co-founder of Esurance, which sells auto, home, motorcycle and renters insurance direct to consumers online and by phone.
Wallace helped launch Esurance in 1999 and built the company through the dot-com crash before leaving the company in 2007. In 2011, Esurance was acquired by Northbrook-based Allstate for approximately $1 billion.
Now with HDVI, Spitz and Wallace are building an insurance product that provides trucking fleet operators with an integrated suite of hardware, software and services that helps them easily manage their operations, as well as reward truck drivers for operating safely.
“We are rebuilding a commercial auto company from the ground up,” Spitz said. “The commercial auto industry has been a challenged space for a decades. It’s a space that’s deeply needed innovation.”
HDVI not only gives trucking fleets insurance coverage, but also supplies services through software and telematics that allows trucking fleet operators to manage driver fatigue, driver recruitment and retention, and bonus programs for especially safe drivers.
HDVI’s customers include small to medium-sized business fleets that usually operate fleets up to 125 vehicles. The startup is currently operating in Alabama and Tennessee but has plans to launch in seven more states this year with the new funding. Though HDVI is headquartered in Chicago, the company launched in Alabama and Tennessee first because of the states’ friendly insurance regulations. Besides its Chicago headquarters, HDVI has offices in San Francisco, where Wallace is based, and in Greenville, South Carolina.
The new financing will also be used to hire more employees and build additional tech features.
Throughout the Covid-19 crisis, the founders say HDVI’s business has remained strong because it largely services essential industries.
“We’re a fairly recession-resistant business,” Spitz said. “Whether the economy is good or bad, the world relies on trucking. The vehicles that were out there on the road, resupplying grocery stores and the medical supply chain and so forth were truck drivers.”
“The impact of Covid amplifies the value of our product to bring significant savings to trucking fleets,” Spitz continued. “In large part, [Covid] highlighted the need for the logistics and trucking industry.”
HDVI is just one of many insuretech startups in Chicago, and HDVI hasn’t wasted time getting to know its peers. When HDVI first launched, Spitz says he worked out of Snapsheet’s office, and now, the startup is currently subleasing office space from home insuretech company Kin.
“We know the other insuretechs in town well,” Spitz said. “We collaborate with them often, and we are exploring potentially working with the companies in various ways.”
