Pouch, an insurtech startup that specializes in auto coverage for small businesses, has secured an undisclosed amount of seed funding from ILS Capital Management.
ILS, based in Bermuda, is an employee-owned, SEC-registered investment adviser with $300 million in assets under advisement. Pouch represents a new line of business for ILS, which invests primarily in insurance and reinsurance contracts.
As part of the investment, ILS is giving Chicago-based Pouch access to its related insurance company to help with policy underwriting and distribution. Pouch launched last year as an alternative to traditional auto insurance for small businesses. The startup employs 10 people.
“Insurance presents more hurdles to entrepreneurs than just about any other industry. You not only have to raise capital, you also have to find an insurer to write the policies, not to mention all the regulatory approvals,” said Steve McKay, founder and CEO of Pouch. “ILS Capital has given us everything we need to move as fast as possible to take advantage of the opportunities in commercial auto insurance.”
Designed for contractors, landscapers, florists and other small businesses that depend on vehicle fleets, Pouch offers free GPS tracking for every vehicle it insures, helping small business owners manage and protect assets while earning discounted rates. Pouch is available only in Illinois but will roll out to other states in the coming months.
Auto insurers like Allstate, Progressive and State Farm offer discounts to safe drivers who let their on-the-road behavior be tracked. Likewise, big corporate fleets install GPS tracking devices that monitor drivers’ activity and can lead to insurance discounts. Now, Pouch is giving that opportunity to small businesses.
“Unlike traditional commercial insurance, we’re not just here when you have a claim to report. We make it affordable to get information that keeps your employees and your business assets safe,” McKay said. “If your employees are driving poorly and putting your business at risk, you’ll know. And when your employees are driving safely, we’ll reward you. It’s an entirely different way to think about insurance — a true ally to help you keep an eye on your business.”
Pouch sets its rates according to a policyholder’s driving activity, a practice known as usage-based insurance. Another wrinkle: The startup delivers instant insurance quotes, with a potential policyholder required to enter only basic information that Pouch then supplements with additional data.
Pouch says the free GPS vehicle tracking software enables a small business to:
- Know where their trucks and vans are at a given time.
- Figure out whether drivers are being safe on the road.
- Determine the most efficient routes.
“Pouch proves you can have a partner that actually invests in making your business stronger,” said Gloria Guntinas, chief operating officer of Pouch. “Vehicles are revenue generators for small businesses. They make deliveries. They transport tools and parts. They get craftsmen to job sites. By giving every customer free vehicle tracking software and rewarding good drivers, we help business owners improve safety and decrease risk, save money and grow their businesses.”
ResearchAndMarkets.com says the size of the global market for commercial telematics, a rapidly growing sector that includes GPS tracking for fleets, reached $40.3 billion last year.