Let’s build the future that we want to live in.
Our Investment in Lula: Building API-Based Insurance in a Pandemic
“Slowly at first, then suddenly all at once.”
This quote is variously attributed Mark Twain and F. Scott Fitzgerald, though it actually draws on dialogue in Ernest Hemingway’s writing.
Today Lula announced its $18M funding round led by Founders Fund and Khosla Ventures. We couldn’t be more thrilled for co-founders Michael and Matthew for this next phase of building the business with substantial additional backing.
Lula is an insuretech company, building an API based platform to help companies obtain and manage insurance policies in a fully integrated software suite. Lula’s customers range from trucking & logistics companies to car rental fleets to military personnel, and Lula offers them insurance products that can be tailored to their needs even if episodic in nature. For example a long haul trucking fleet may need varying coverages for short terms depending on the cargo they’re hauling or which trucks are being utilized.
I first met the Lula co-founders in Boston about 2 1/2 years ago, at the very end of 2018. Lula 1.0 was a ride-sharing network business at the time, and while we were somewhat skeptical about the opportunity for new entrants in that market we were very impressed with Matthew & Michael as founders. We seek to back top notch entrepreneurs here at NextView, but we also have to have very high conviction about the market opportunity as well. We didn’t pursue an investment at that time but agreed to keep in touch.
Fast forward to the spring of 2020. The shadow of COVID is descending on society broadly, and there’s great uncertainty about what it means for the tech ecosystem. But undaunted, the Lula founders pivoted to focus directly on a problem they had to solve themselves with Lula’s initial business, namely the need for easy-to-integrate insurance solutions. A business can quickly process payments by integrating PayPal or Stripe but in most cases there isn’t a API solution for insurance needs. It’s a difficult problem to tackle, but one where the market opportunity to rethink insurance is vast and both private and public market investors (Root, Lemonade, Oscar, etc) have recognized this. So we made a pre-seed investment in Lula and they also participated in NextView’s virtual accelerator program we launched Summer 2020 as the world went into lockdown.
The Lula team took this from an idea to live with paying customers in their first market segment within about 5 months. They quickly ramped to seven figure recurring revenue just a few months after that. Matthew & Michael had decided in early 2020 to build Lula in Miami, and it was interesting to watch the rapid progress of Lula in parallel with the increased prominence of the Miami startup ecosystem. We’d introduced Lula and Founders Fund awhile back just to get to know each other, and at this point the company unsurprisingly started to receive interest from a number of VCs.
Sometimes things build slowly at first, then everything seems to happen in rapid succession. It’s still early days for Lula, but with progress at a rapid clip the future looks very exciting.