Hoping to transform Brazil's insurance industry, Minuto Seguros, an online insurance broker in Brazil, announced late Wednesday night that it's received a Series A round, led by Redpoint e.ventures, Brazil's largest early-stage VC fund and the first Silicon Valley-affiliated fund.
Redpoint e.ventures was formed to focus solely on Brazil, and in July closed a $130 million fund. Minuto Seguros is its sixth investment in the region.
Minuto Seguros, which was founded in 2011 and funded initially by founder Marcelo Blay, an insurance industry expert with 20 years experience, wants to help Brazil's 85 million Internet users buy insurance online. At the moment, the company only offers auto insurance, which is a big opportunity today since 60% of cars are uninsured in Brazil.
But in Brazil, getting that insurance is still tedious. "There are 70,000 brokers," said Blay, in an interview with me. "Today, when someone wants to buy insurance, they call their broker." In Brazil, it's mandated by the government that people buy insurance through a broker.
"The broker then has to get in touch with insurance companies and obtain quotes, and then prepare excel spreadsheets." On average, it takes two days for a person to get quotes back, said Blay. "What we're doing is helping them obtain information directly from the Internet."
Minuto Seguros has relationships with 12 insurance companies, enabling them to easily get quotes and provide consumers with options. "We can give them a quote in 30 minutes of more than 12 insurance companies," said Blay.
By streamlining the way people get insurance, the company is helping consumers save about 15% on insurance policies, said Blay. As for economics, Minutos Seguros takes a low double-digit percent brokers fee.
While Minutos Seguros appears to be helping consumers, is it displacing the brokers who might be out of a job?
Blay doesn't think so. Because of the emerging middle class, there are four million people who don't yet have a broker to buy insurance.
Beyond auto insurance
In the future, Minutos Seguros plans on providing much more than auto insurance, which means it'll have a lot more to sell to each customer. Eventually, other insurance products include home insurance, travel insurance, life insurance and health insurance.
"There is a very good repeat, renewal business," said Yann de Vries, Managing Director and co-Founder of Redpoint e.ventures. "There’s all the cross-selling opportunities."
Minutos Seguros is Redpoint e.ventures sixth investment. The others include Xango, an Internet security firm, Viajanet, an online travel company, Shoes4you, an e-commerce play, 55Social, a social media marketing platform, and Sophie & Juliete, an e-commerce play in the jewelry market.