When new technology is created and adopted, a chain reaction of goods and services emerge from it. This is exactly the case with Flock Cover, the company that has pioneered the use of big data to provide intelligently-priced drone insurance. Through a mobile app, users can purchase on-demand drone insurance and the pay-as-you-fly model with coverage starting in as little as an hour. This provides drone pilots with a great and flexible alternative to expensive annual insurance policies, catering to the flexible needs of the on-demand economy.
London TechWatch sat down with CEO and cofounder Ed Leon Klinger to discuss its latest round of funding, which brings the total funding amount to £2.8M over four rounds for the startup founded in 2015.
Who were your investors and how much did you raise?
Flock raised a £2.25M Seed round, led by Anthemis. Other investors included Silicon Valley’s Plug and Play, Seed and Speed, and London VC Downing Ventures (who are re-investing having led Flock’s pre-seed round in 2016), along with a number of angel investors.
Tell us about Flock’s service.
Flock is pioneering the use of Big Data to intelligently price insurance. Flock has formed a global partnership with Allianz, the world’s largest aviation insurer, to launch their first product ‘Flock Cover’: a pay-as-you-fly insurance and safety app for drone pilots.
The Flock Cover app aggregates real-time data, including hyperlocal weather conditions, population density, proximity to high-risk areas (such as airports), and more. Flock’s proprietary algorithms then analyse this data to quantify the risk of any given drone flight in a matter of milliseconds. This quantified risk metric is then converted into an intelligently and fairly priced insurance premium, allowing drone pilots to purchase hourly insurance policies for their flights at the touch of a button.
The Flock Cover app also simultaneously functions as a safety tool, providing drone pilots with a real-time risk report for every flight. In addition, Flock has recently released a ‘predictive risk analysis’ feature which allows pilots to pre-emptively identify and plan for flight risks up to ten days in advance, rewarding safer flights with cheaper insurance premiums.
What inspired you to start Flock?
Flock was founded in the Data Science Institute of Imperial College London, in 2015. Flock’s founder–Antton Penna– was writing his thesis on the use of real-time data to quantify drone flight risks. The paper was published and was well received by the drone industry. Antton then began building the first version of the Flock platform at the Data Science Institute with help from a post-doctoral researcher in artificial intelligence, with funding from Innovate UK. Antton had already previously founded a successful tech startup and had worked at Audi designing concept cars.
I did my Master’s in Engineering Science at Oxford University and went on to do a Master’s in Technology Policy at Cambridge University. At Cambridge I focused on the future of the autonomous world, writing and publishing papers on driverless vehicles, AI Safety, and autonomous drones. In my paper on the future of the drone industry I identified the same solution that Antton had already begun building; that real-time data could be leveraged to identify and quantify the risks of drone flights. Antton and I were introduced by a mutual friend; we began meeting on weekends to discuss how we might build a business. The rest is history!
How is Flock different?
What makes Flock different is its ability to algorithmically price insurance using real-time data and scientific risk analysis. This unlocks hourly, localised insurance
policies that are priced proportionally to the individual flight’s risk (Flock’s policies start from £3 a day). This sets us apart from traditional insurers offering ‘flat-rate’ annual premiums, who cannot differentiate between high-risk and low-risk customers or flights; so they simply charge everyone roughly the same amount for an annual policy.
What market are you targeting and how big is it?
At the moment, Flock provides insurance to commercial and recreational drone pilots in the UK. The drone industry is growing daily, and there are now over 4000 commercial pilots in the UK.
Flock is working with its insurance partner Allianz, to distribute its on-demand drone insurance to pilots across Europe.
What’s your business model?
We take a commission on every policy sold through our app. Flock’s risk intelligence platform also has the versatility and potential to be applied to several industries beyond drones.
Do you foresee any future laws regulating drones that could interfere with your business?
I think that having a regulatory framework in place, be it to do with registering your drone or educational activities, will only be positive to the insurance industry because it alerts users to the fact that there are risks involved in flying drones, and that they should and can be mitigated.
What was the funding process like?
Actually, it was very manageable. We were lucky enough to have a strong syndicate of investors already on the cap table, who helped to guide us through the (occasionally thorny) fundraising process. We traveled to the US and Germany multiple times to meet with the new investors we wanted most; we’re now in the very fortunate position bringing in a truly global set of hands-on individuals and funds.
What are the biggest challenges that you faced while raising capital?
The fundraising process was relatively smooth for us, to be honest. Of course, it’s always a challenge staying on top of communication with a large number of investors over several months, whilst also running a growing startup. What’s more – we have built a complex technology which isn’t necessarily easy to sum up in just a few words; as such we spend a lot of time with our investors, making sure they’re up to scratch and fully informed as to how and why our technology is unique, defensible, secure, etc.
What factors about your business led your investors to write the check?
Flock is pioneering the use of real-time data to intelligently and fairly price insurance, and its core technology has the potential to be utilised in other industries. What’s more, the Flock team is made up of passionate and talented individuals who are pushing boundaries with the work that they do.
What are the milestones you plan to achieve in the next six months?
Launching Flock’s drone insurance platform internationally and growing our London team.
What advice can you offer companies in London that do not have a fresh injection of capital in the bank?
Be open about your passion and vision; don’t hide them away. Speak on stage about them if possible; it’s amazing what opportunities can arise in the form of investment, and elsewhere when you are sharing about what you’re working on.
What’s your favorite outdoor activity in London?
I’ll be in-between the outdoor gym and the outdoor barbecue on London fields, most summer weekends.
