It's not every day that top hedge funds and famous venture capitalists line up to back a high-tech insurance startup designed specifically for owner-operators and small fleet owners, but that's exactly what happened with twins Michael and Matthew Vega-Sanz's Lula, which pitches its program as a pay-by-the-day, or "episodic" coverage that could save operators money on idle trucks.
Lula's basic concept comes from the Vega-Sanz' upbringing on a central Florida farm that raises Paso Fino horses. The twins' grandfather had a small trucking operation, like many farmers do, and their older brother maintains a small fleet of 15 or so vehicles. He sometimes uses the rigs to do disaster cleanup with FEMA.
The twins grew up with their older brother lamenting that he had to pay insurance on trucks that sat idle all but a few days a week, and sometimes longer due to the spotty nature of FEMA work. One fateful night at Babson College in Massachusetts, the twins got to craving pizza so badly that they hacked together an app that would allow them to borrow cars from other students on campus.
While that initial app fizzled out, Michael and Matthew made real inroads on working with insurers and underwriters for "episodic" insurance. During the pandemic, they pivoted that tech infrastructure to help out their older brother.
That's how Lula, the small fleet insurance startup that's raised $18 million from the likes of Bill Ackman and others, came to be.
Overdrive caught up with Matthew to explore the ins and outs of this novel idea in insurance. Big insurers like Progressive and others said they didn't have a comparable product and weren't aware of plans to bring one to market.
Basically, Lula works by signing up an owner-operator or small fleet owner with authority to a $250/month service that gets the motor carrier its insurance filing, a necessity for any business with motor carrier authority. Then, by working with the electronic logging device provider and through its own web portal, Lula clients can book days when they need insurance, usually at about $40 or $50 a day per truck. Matthew said Lula's ideal customer would own in the neighborhood of five or seven trucks, and that they'd own trucks they run four days or less per week.
