meet justos, the new brazilian insurtech that just got backing from the ceos of 7 unicorns

Data-Driven Auto Insurance Arrives in Brazil with Justos

In the United States, utilizing a driver’s history to determine auto insurance premiums is a well-established practice. However, in emerging markets such as Brazil, this approach remains comparatively new.

Introducing Justos: A Novel Insurer

A recently launched startup, Justos, intends to be the first Brazilian insurance provider to leverage driver data. Their aim is to incentivize safe driving habits by offering more equitable pricing structures.

Seed Funding and Key Investors

Justos has successfully secured $2.8 million in a seed funding round. This round was spearheaded by Kaszek, a prominent venture capital firm in Latin America.

Additional participation came from Big Bets, and the CEOs of seven unicorn companies, including:

• Assaf Wand (Hippo Insurance)
• David Vélez (Nubank)
• Carlos Garcia (Kavak)
• Sergio Furio (Creditas)
• Patrick Sigrist (iFood)
• Fritz Lanman (ClassPass)
• One anonymous CEO

Senior leaders from companies like Robinhood, Stripe, Wise, Carta, and Capital One also contributed to the funding.

The Founding Team

Justos was co-founded by serial entrepreneurs Dhaval Chadha, Jorge Soto Moreno, and Antonio Molins. Prior to this venture, they held positions at various Silicon Valley companies, including ClassPass, Netflix, and Airbnb.

The Genesis of Justos

“Although we had been acquainted for some time, it was coincidental that all of us were simultaneously considering the development of a new venture within Latin America,” Chadha explained. “We dedicated two months to exploring potential avenues, engaging with individuals and investors across the United States, Brazil, and Mexico, ultimately leading to the concept of an insurance company capable of modernizing the industry, beginning with auto insurance.”

Addressing a Significant Market Gap

The founders identified a substantial opportunity in the Brazilian auto insurance market, where it’s estimated that over 70% of vehicles remain uninsured.

Current Challenges in the Brazilian Insurance Landscape

Obtaining insurance in Brazil is often a protracted process. Initial coverage can take up to 72 hours, with the complete policy arriving after two weeks. Furthermore, claim resolution for vehicle damage or loss is frequently delayed, and pricing is often perceived as unfair or lacking transparency.

Justos’ Approach to Improvement

Justos seeks to transform the Brazilian auto insurance experience by evaluating driving behavior to inform insurance policy pricing. Like Root in the U.S., they plan to gather user data via mobile phones to “more accurately and assertively assess different risk levels.” This approach allows them to potentially offer plans up to 30% less expensive than traditional options, with monthly discounts based on individual driving patterns.

Leveraging Technology for Accurate Pricing

“We assess driving safety using the sensors present in mobile phones,” Chadha stated. “This enables us to provide more affordable insurance to responsible drivers, mitigating the biases inherent in conventional insurance pricing models.”

AI and Machine Learning for Efficiency

Justos also intends to utilize artificial intelligence and computerized vision to expedite claim analysis and processing. Machine learning will be employed for image analysis and the creation of automated claim support systems.

A Customer-Centric Experience

“We are developing a mobile-first, design-focused, and customer-centric experience that aims to revolutionize insurance in Brazil, mirroring Nubank’s impact on the banking sector,” Chadha shared with TechCrunch. “We will eliminate hidden fees, complex terminology, and confusing insurance jargon.”

Distribution Strategy

Justos will distribute its products directly to consumers, as well as through partnerships with banks and brokers.

“By engaging directly with consumers, we can acquire users at a lower cost than our competitors and pass those savings on to our customers in the form of reduced prices,” Chadha noted.

Accessibility and Convenience

Customers can purchase insurance through the Justos app, website, or even WhatsApp. Currently, the company is building a waitlist, with policy sales scheduled to commence later this year.

Market Opportunity

During the pandemic, the Brazilian auto insurance sector experienced a 1% decline, according to Chadha. He believes this indicates a significant untapped demand that will be realized as conditions improve.

Social Responsibility

Justos incorporates a social mission into its business model. The company plans to cap its profits and donate any excess revenue to nonprofit organizations.

A Vision for the Future

Justos has an ambitious goal: to make insurance universally accessible and enhance road safety globally.

“Individuals will approach everyday risks with increased confidence and a spirit of adventure. Road accidents will decrease due to incentives for safer driving, and streets will become safer,” Chadha said. “The focus of the insurance industry will shift from profits to people.”

Operational Setup and Expansion Plans

The newly acquired capital will be used to establish operations, including forging partnerships with reinsurers and an insurance company for fronting, as Justos is initially operating as an MGA (managing general agent).

The company is also focused on developing its products, including apps, backend systems, internal tools, and processes for underwriting, claims, and finance. The data science team is building a proprietary pricing model.

Initially, Justos will concentrate on Brazil, with future plans to expand throughout Latin America, then into Iberia and Asia.

Kaszek’s Perspective

Andy Young of Kaszek expressed his firm’s admiration for the team’s experience and dedication.

“This is a substantial market ripe for innovation, and this team is well-equipped to lead the charge,” Young told TechCrunch. “They have adopted a consumer-centric and data-driven approach to building an insurance platform that is not only more affordable and rewards safety but, as the brand suggests in Portuguese, is fairer.”