Justos, a Brazil-based auto InsurTech startup, has raised $5.5m in a funding round led by a major reinsurer.
According to a report from Latam fintech, the reinsurer which lead over 90% the round preferred to stay anonymous. The remaining $500,000 of the capital came from MSR Capital, a manager from Israel.
Justos says that its differential is to offer auto insurance with a more driver-friendly pricing. The startup uses machine learning to create models that can predict claims and, as a result, charges an individualized value for each driver.
The startup sells its insurance on a monthly payment basis. According to how the driver drove during the month, they can get a discount on the next monthly payment.
Since it began operations in January 2022, Justos has gained “thousands of customers” and its claims ratio is slightly above the average of the top 10 incumbents, partly because the startup’s premium is more competitive.
Dhaval Chadha, the CEO and co-founder of Justos, told Brazil Journal that the new round is a “bridge of sorts”, and that the valuation will be set based on the startup’s next funding round.
With the capital that is coming in, Justos will extend its runway to more than 30 months. According to Dhaval, the startup does not intend to reach breakeven before the end of this period. The idea is to continue investing in growth to raise a strong Series B, preferably without a downround.
Dhaval admits that Justos is running lower growth than anticipated when it made Series A not least because expectations were high to justify the valuation at the time. “We’re at lower growth but much healthier than we had projected, and on a pretty comfortable runway,” he said.
Last year, Brazilian InsurTech startup 180° Seguros netted $31.4m in its Series A funding round, which was led by 8VC.
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