A group of investors is putting $17 million into The Zebra, an Austin startup that lets consumers compare car insurance rates online.
Investors in the deal included Daher Capital of New York; Ballast Point Ventures of Tampa and Silverton Partners of Austin, as well as Dallas Mavericks owner Mark Cuban; venture capitalist Mike Maples Jr. and Simon Nixon, founder of Moneysupermarket.com, a British price comparison site for financial services.
The Zebra was founded in Pittsburgh in 2012 by Adam Lyons, who previously worked in the underwriting and brokerage sides of the insurance industry. After securing funding from Silverton Partners, it moved its headquarters to Austin in 2013.
The Zebra’s website lets users compare more than 200 of the nation’s top auto insurance carriers to get real-time quotes. The process exposes drivers to rates they wouldn’t see through more traditional routes of purchasing, Lyons said.
The service is free to users. Zebra generates revenue by selling policies.
According to Lyons, nearly half of U.S. drivers shopped for car insurance in 2014. “It’s not as much changing folks behavior because everyone’s already looking around. It’s how do we get in front of these folks,” he said.
To that end, the 50-person company will use the new funding to make a sales and marketing push. It’s also building out to its engineering team as it revamps its desktop application and launches a mobile app.
“We’re ready to expand and we will at least double our headcount this year,” Lyons said. “We’ll be hiring in across all departments, and we’re moving into a new downtown space (on San Jacinto Boulevard).”
Investor Mike Maples said in a written statement: “Insurance shopping is a major pain point for the 250 million-plus U.S. drivers on the road. With The Zebra, we’re demystifying an opaque insurance industry and simplifying that process in a way that serves both drivers and insurance companies.”
To use the service, consumers enter their car make, model and year and their zip code. The Zebra compares more than 3,000 products and in less than 90 seconds presents the best matches.
The user then answers several other questions, such as credit score and whether the driver has had an accident or ticket in the past five years, and the matches are narrowed down further. The user can buy a policy by phone or through the insurance company.
“What folks are looking for is the ability to compare quotes, and now technology allows us to create the tools needed for insurers and consumers,” Lyons said.