US-based Lula, an insurance infrastructure startup, announced on 8 July 2021 that it has raised US$ 18 million in a Series A round of funding.
Investors: The round was co-led by Founders Fund and Khosla Ventures, with participation from SoftBank, hedge fund manager Bill Ackman, Shrug Capital, Steve Pagliuca (Bain Capital co-chairman and Boston Celtics owner), Tiny Capital’s Andrew Wilkinson. Existing investors – Nextview Ventures and Florida Funders also invested.
Founded by 25-year-old twin brothers Michael and Matthew Vega-Sanz, Lula’s mission is to provide companies of all sizes with insurance infrastructure. Lula originally emerged from another business – renting cars from other students. The twins had started the business while in college. In September 2018, they formally launched the app beyond their college campus. Within eight days of the launch, Lula became one of the top apps on Apple’s App Store. The brothers soon after dropped out of college.
As their company grew, they started partnering with car rental providers to supplement its supply of vehicles. In the process, they realized that the most compelling aspect of their offering was the insurance infrastructure they’d built into it.
“Our rental companies began to put a significant portion of their business through our platform, and one day one called us and asked if they could start using the software in the insurance infrastructure we’d built out in the rest of our business,” said Michael, co-founder of Lula.
That was their Aha moment and they realised that maybe the big opportunity here is not a car-sharing app for college students, but something to do with insurance. A few weeks later they shut down their core business and by April 2020, they pivoted to building out Lula that provides Insurance Infrastructure for today’s economy.
“In the same way that Stripe has built a payment API that eliminates the need for companies to build their own payment infrastructure, we decided we could build an insurance API that eliminates the need for companies to build their own insurance infrastructure. Companies would no longer need to build out internal insurance systems or tools. No longer would they need to deal with insurance brokers to procure the coverage. No longer would they need to deal with insurance teams. We can integrate onto a platform and handle all things insurance for companies and their customers via our API,” said Matthew Vega-Sanz, co-founder of Lula.
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