Justos Raises $35.8M Series A - Brazilian Insurtech

Justos Secures $35.8 Million in Series A Funding

Justos, a startup poised to become Brazil’s first data-driven insurance provider, has successfully closed a $35.8 million Series A funding round. Ribbit Capital spearheaded the investment.

New and Existing Investors Participate

SoftBank’s Latin American Fund and GGV joined as new investors in this round. They were joined by existing backers including Kaszek, BigBets, Nubank CEO David Velez, and Kavak CEO Carlos Garcia Ottati.

Prior Seed Funding

In May, Justos had previously announced a $2.8 million seed raise. This earlier round also saw participation from Kaszek, a prominent Latin American VC firm.

Additionally, CEOs from several successful companies contributed, including Assaf Wand (Hippo Insurance), Sergio Furio (Creditas), Patrick Sigrist (iFood), and Fritz Lanman (ClassPass). Senior leaders from companies like Robinhood, Stripe, Wise, Carta, and Capital One also invested.

Founding Team and Origins

The company was co-founded by serial entrepreneurs Dhaval Chadha, Jorge Soto Moreno, and Antonio Molins. They previously held positions at Silicon Valley companies such as ClassPass, Netflix, and Airbnb.

Interestingly, none of the founders are originally from Brazil. They first connected while playing on an amateur soccer team in San Francisco.

Imminent Launch and Growing Waitlist

Despite not yet officially launching its product, Justos has garnered significant investor interest. CEO Chadha states that the launch is “imminent.”

Currently, the company boasts a waitlist of 12,000 potential customers. A driving test and quoting application have already been released to gather data in preparation for the full launch.

Addressing Inefficiencies in the Brazilian Insurance Market

Obtaining insurance in Brazil is often a lengthy process. Initial coverage can take up to 72 hours, with the final policy arriving after two weeks.

Entrepreneurs have also noted delays in claims resolution and a lack of transparency and fairness in pricing.

Data-Driven Insurance Pricing

Justos intends to revolutionize the Brazilian auto insurance landscape by evaluating driving behavior to determine policy rates. Like Root in the U.S., the company plans to leverage data collected through users’ mobile phones.

This approach aims to provide “more accurate and assertive pricing” for different risk levels. Justos projects potential savings of up to 30% compared to traditional plans, with monthly discounts based on individual driving patterns.

Leveraging Technology for Efficiency

“We measure how safely people drive using the sensors on their cell phones,” Chadha explained. “This allows us to offer cheaper insurance to users who drive well, reducing biases in traditional pricing models.”

The company also plans to utilize artificial intelligence and computerized vision to expedite claims processing. Machine learning will be employed for image analysis and the development of automated claims assistance.

Commitment to Social Responsibility

Justos has committed to supporting five nonprofit organizations in its first year of operation. These include Instituto Ayrton Senna (education), AACD (disability), Gerando Falcões (economic opportunity), Casa 1 (LGBTQ), and Conexsus (sustainable development in the Amazon).

The company will cap its profits, donating a portion of the surplus to these organizations.

Expanding Operations and Team Growth

Justos intends to use the new capital to expand its team, broaden its operational reach, and introduce additional insurance products.

Currently a team of 30, the company aims to reach 50 employees by the end of the year and 200 by the end of 2022.

Ribbit Capital’s Investment Rationale

Nick Shalek, general partner at Ribbit Capital, cited the substantial market opportunity and the team’s expertise as key reasons for their investment.

“With over 20 years of experience in Silicon Valley as entrepreneurs and at Netflix, Airbnb and ClassPass, we believe that the Justos team is well positioned to reinvent insurance in Latin America by focusing on creating customer value, lowering prices and expanding the market,” Shalek stated.