By James Thaler

Feb 11 - (The Insurer) - Commercial auto-focused High Definition Vehicle Insurance (HDVI) Group has raised $40mn in additional funding, in an inside round co-led by existing investors Munich Re Ventures, Weatherford Capital, 8VC, and Autotech Ventures, The Insurer can reveal.

The additional funding brings HDVI’s total capital raised since it was launched in 2017 to $87mn. Alongside the fundraise, HDVI has expanded its reinsurance panel to include additional, unnamed AM Best A+ reinsurers.

Sources said the insurtech has been working on the fundraise with its investment banker Ardea since at least the second half of last year, and had shrank its workforce by around 19 roles in November as a means to extend its runway.

The company is understood to write around $50mn in premium, with Hippo-owned fronting carrier Spinnaker serving as its paper.

As part of the latest funding round, Alexei Andreev from Autotech Ventures and Jake Medwell of 8VC are joining HDVI’s board of directors, alongside existing members Jacqueline LeSage of Munich Re Ventures, Will Weatherford, and HDVI’s Reid Spitz and Chuck Wallace.

HDVI was founded in 2017 by Wallace and Spitz. Spitz took over as president of the firm a year ago, and at the beginning of this year transitioned to CEO, with Wallace remaining on as a strategic advisor and supporting HDVI’s “long-term vision”.

Wallace was previously a co-founder of digital personal auto insurer Esurance, which was acquired by Allstate in 2011.

Spitz originally served as COO for four years when the insurtech was launched, before transitioning to chief product officer in late 2021, ahead of becoming president in 2024.

Before joining HDVI, Spitz spent three years working at venture firm 8VC as an investment associate and then in a strategy and business development role.

Adam Barnett – who previously spent six years with trucking-focused insurer Canal Insurance – has served as HDVI’s CUO since September 2021, after originally joining the company in 2019 as head of underwriting.

Former Canal actuarial executive Todd Witte has been HDVI’s chief actuary and insurance product officer for the last three years, while former Lemonade and Travelers executive Karla Ferguson is its chief claims officer.

Further details on the fundraise, including the insurtech’s latest valuation, could not immediately be confirmed.

A spokesperson confirmed the latest fundraise in a statement to The Insurer.

"HDVI’s innovative use of real-time telematics is reshaping commercial trucking insurance," Will Weatherford, managing partner at Weatherford Capital, said in a statement.

"This latest fundraise underscores the confidence we have in HDVI’s leadership and ability to deliver profitable growth," he added.

Spitz also commented on the fundraise.

"With the infusion of capital, HDVI is well positioned to continue leading the industry in leveraging technology in commercial auto insurance," he said.

"Our team remains committed to continued innovation using telematics and other data sources along with new AI tools throughout the commercial auto policy lifecycle to drive risk reduction and efficiency at scale,” he added.

Wallace said he is “looking forward” to supporting Spitz in his new role leading the company.

“Reid is the right person to lead HDVI as it continues its strong growth and innovation in the future,” Wallace commented.

Barnett said that the added support from A+ rated reinsurers strengthens HDVI’s ability to protect insureds and serve the increasing demand for innovative transportation insurance.

“We’re excited to have the backing of global leaders in reinsurance who chose to partner with

HDVI due to our preeminent use of telematics in underwriting and data-driven approach,” Barnett commented.

Fundraise brings total capital raised to $87mn since ’17 launch

HDVI’s latest fundraise comes after it announced in August 2020 a $16mn Series A funding round led by Munich Re Ventures and 8VC that also had participation from Sinai Capital Partners.

The Chicago-based insurtech also raised a $32.5mn Series B round led by Weatherford Capital that was announced in August 2021.

That funding round brought in new investors Daimler Trucks North America and McVestCo, with continued participation from 8VC, Autotech Ventures and Qualcomm Ventures.

The company said at the time that the proceeds would be used for the continued development of new products and to fuel the insurtech’s growth on a national scale.

HDVI also has a longstanding relationship with Munich Re where the (re)insurance giant serves as both an investor and capacity provider.

It describes itself as delivering modern insurance driven by safety, service and savings to small and mid-size trucking fleet operators.

The insurtech says its goal is to become a partner to the fleet business owner by providing next-generation insurance integrated with best-in-class telematics hardware, advanced software and services to help them manage their vehicles and business each day.

HDVI argues that by incorporating telematics and dash cam data from its customers into its integrated risk management model, it is able to select, price, manage, and retain risk more accurately and efficiently than incumbent commercial auto insurance providers.

It claims that 95 percent of its customers see reductions in hard breaking or speeding within their first policy year with the company and that it gives out around $150,000 each year to customers as safety rewards under its Drivers Rewards program.

HDVI previously expanded its product portfolio with the addition of HDVI Shift, which the firm claims has driven significant, sustained growth, as it achieved a 107 percent compound annual growth rate $(CAGR)$ and a loss ratio “well below the industry average”.

The company said that the use of telematics helps save customers 20 percent upfront on monthly premiums based on safety performance.

It also said that in 2024 alone, its customers logged nearly one million miles of safe driving daily and saved $3.2mn, triple the previous year’s savings.

"We've harnessed over 7.5bn miles of telematics data to enhance our understanding of risk models, refine our pricing models and underwriting process, and improve how we manage claims in-house to deliver a more streamlined, efficient, and customer-centric experience,” Spitz commented.

“These insights allow us to be highly price competitive while attracting fleets that prioritize safety and operational efficiency," he added.

The company also has a Driver+ mobile app.

On Tuesday, HDVI said it has revised pricing and underwriting, enhancing traditional methods with approaches that base premiums on actual driving behaviors, which it said results in “fairer, more personalized pricing”.

In addition to leveraging telematics, HDVI said it integrates data from the Federal Motor Carrier Safety Administration and other sources to enhance risk assessment and pricing.

It also disclosed that nearly 90 percent of customers see safety improvements within their first policy term and a reduction in predicted crash rates by nearly 10 percent.

The insurtech’s products are currently available in seven states – Illinois, Indiana, Minnesota, Ohio, Tennessee, Georgia and Texas.

News of HDVI’s latest fundraise comes as funding conditions for insurtech business and large incumbents alike are expected to improve in the coming months, with the cost of capital improving as interest rates continue to fall.

The Insurer broke the news recently that Kin is working on its latest fundraise aimed at valuing the homeowners insurtech at more than $2bn, a deal that is expected to fuel the Sean Harper-led firm’s expansion into additional states after hitting $500mn in premium in 2024.