Darwin startup attracts US$2 million investment, seeks data to lower insurance costs in Brazil

RIO DE JANEIRO, BRAZIL – Darwin insurtech dedicated to providing technology to the insurance market, on Wednesday, July 21, announced an R$11 (US$2) million seed funding round.

Founded in early 2021, Darwin’s first round of investments will involve Invisto and Duxx venture capital funds, both focused on fintechs and now in the insurance market. One of Duxx’s partners is Marcos Couto, a professional with over 30 years experience in this sector.

The investment also includes important angel names such as Felipe Affonso, ex-director of Softbank Brasil, Antonio Lemos, ex-CEO of Unidas car rental company, Ricardo Bechara, one of Rappi Brasil’s founders, as well as Fernando Julianelli, CEO of Stock Car racing, and Enrico Ventura, ex-general director of Bradesco Seguros Auto.

Darwin’s business aims to add a touch of artificial intelligence and data analysis to the insurance market – a sector in search of good ideas to effectively take off in Brazil.

Darwin’s first product will be auto insurance. It expects to be licensed to launch it on the market in the first quarter of 2022.

Darwin’s insurance aims to reward more prudent drivers with lower policies than more aggressive or bad drivers. And, in practice, to be able to offer services at a lower price than the competition based on an in-depth analysis of customers’ profiles.

To this end, a Darwin app in its final development stage aims to use data from telemetry sensors to assess relevant information about a driver’s style, such as average speed, the way he or she handles the wheel, the amount of information checked on the cell phone while the car is in motion, and so on.

All of this will be fed into each customer’s individual score. “This will enable the creation of more precise and adaptable pricing parameters for the calculation of each person’s premium,” says Firmino Freitas, one of Darwin’s founding partners.

“There will be no standard ‘average price’ system of insurance for consumers with similar profiles, used by much of the competition, but which ultimately creates unfair averages.” In addition, the plan is to reduce the paperwork involved in contracting the product.

Freitas is a business administrator and was a partner at RGS Partners, one of the main M&A and fundraising boutiques in Brazil, as well as director of M&A at Grupo BBM Logística, one of Latin America’s leading logistics companies.

He is joined by Carlos Alberto Souza Barros, also an administrator, who previously worked at Goldman Sachs’ treasury department and was a partner at Stone Co. Group, where he was responsible for treasury, offshore capital markets, financial risk management, pricing, and large clients’ trading desk. The executive team includes executives from large companies such as TIM, Loggi, Movile, Bradesco Seguros, and HDI Seguros.

The company decided to start in the auto industry because it identified high repressed demand in the segment. According to the National Confederation of Insurers (CNSEG), in 2020 this market was worth around R$35 billion with only 30% of the Brazilian fleet insured. The insurtech expects to be licensed by the Superintendency of Private Insurance (SUSEP) to start operating by the end of the year.

The auto market is the first step in an ambitious plan by Darwin’s partners for the insurance market. “The expansion of the product portfolio should include other lines of business such as residential and cell phone, in addition to the offer of financial products which have synergies with our client portfolio, such as individual loans,” Souza Barros says.

“We expect to reach 1 million people in the first 5 years of operation of our ecosystem of products and solutions.”

Source: Exame

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