🚨 Disclaimer
All research on startup and the whole investment memo has been done for personal use of Akim Arhipov.
AI-powered vehicle verification for insurance companies DriveX automates your pre-inspection process reducing fraudulent claims and costs up to 90%
Addressable Global Market:
*PLEASE NOTE, more detailed market numbers are available upon the request (Market Analyses file)
Car inspections are manual, time consuming and lack transparency. Still, they are required in rentals, insurance, leasing and other businesses. There are more than 300 million rental transactions across the world yearly.
Remote Vehicle inspection, powered by computer vision.
Product consists of two modules:
- Web-app (SmartScan)
- Body part segmentation
- Windshield damage detection
- Body damage detection
- Customer portal
- Vehicle historical data
- Quality and damages
- Branding and integrations
Taking apart the segments, DriveX is allows to improve crucial metrics within the industry it is operating in. Such as Fraud Prevention / Cost Efficiency / Customer Experience. You can also see illustrative graph below.
Target audience:
- Insurance Companies
- Rentals and mobility
- Leasing companies
- Sell-and-Buy segment
- Registration, import-export companies
- Repair shops
Until today the focus has been on the Insurance companies as it was determined that the entry level for those is lower and onboarding faster compared to the rentals in mobility.
As this has now been proven, DriveX is ready to approach rentals in mobility and start growing this segment of its target audience.
*PLEASE NOTE, more detailed market numbers are available upon the request. (Business Roadmap file)
Until today DriveX has been mostly focusing on outbound sales. The team has selected, validated and utilised the approaches. Most of the leads have been generated vie automated LinkedIn and e-mailing campaigns.
DriveX has identified customer profiles is using different templates/approaches according to the profiles, maximising a chance to success.
Also, as much as it was possible resource-wise until today, DriveX has also utilised content marketing.
CAC: € 6,850.00
LTV: € 25,979.40 (over 5 years)
LTV:CAC: 3.79
After closing the round, the marketing activities planned:
- Visiting CMO as a service
- Addition of product marketer
- Addition content marketer
- Addition digital marketer
- limited help from content writer and a freelance designer.
Unit economy
*PLEASE NOTE, additional Documents available on request (DriveX historical results table)
Below are the parts of the product which are ready at large (some minor parts in progress in some of those) :
- Image Capturing Application
- Vehicle Verification
- Image Quality Validation
- Image Content Validation
- Fraud Validation
In Development modules:
- Vehicle Condition check
- Repair Marketplace
- *AI Marketplace
- Vehicle Condition Sharing
* AI Marketplace is the part, where team puts a lot of effort in. Shortly, this product module will allow people to teach AI. In case DriveX algorithm lack some functional for the detection (for example it can not identify wether the car has gas tank installed), user will have a chance to teach it. It is being decided that reward system for the community efforts could be Rev Share for example.
Also: The current model allows to generate more and more data, which later on can be converted to a huge car-related database and be seen as one of the additional revenue streams as data is really expensive nowadays.
Future roadmap:
Operations from here on
Add marketing power, hire in-house + use help from aside. Add development power in-house.
Go-to new markets. Launch other parts of business. Reach even higher grows and stable MRR.
Proceed down the sales funnel, which can be seen below in this document.
Validations
Launched in: December 2019
Number of users: 10
Paying customers: 10
MRR (purely re-occurring revenue, DriveX is not counting in any of the setup fees + additional one-time payments into this metric):
- January 2022- 4382 €
- February (projected) - 7900 €
*PLEASE NOTE, more detailed revenue numbers are available upon the request (Historical Data file)
Traction: Growing 190% QoQ on average (key metrics is vehicle scans per Q). Currently, DriveX is working with insurance companies (90% of the clients). There are several discussions with Europcar and Sixth Baltic going. Private sector has also showed interest, transportation departments in particular.
Clients:
Investments so far
Stage: Seed
Number of investors: 8 investors until today, keeping 12,5% equity
Investors so far:
- Risto Rossar, Insly and ex-IIZI (R Holding OÜ)
- Anti Pihtje, ex-Hertz
- Rainer Virve, Carglass Estonia and Sven Freiberg, ex-ERGO (Windrox Investment OÜ)
- Siim Teller, ex-Skype (Lemonade Stand OÜ)
- Taavi Tamkivi, ex-Wise and Salv (Susilaane OÜ)
- Kalle Mikko Silventola, first angel investor in Bolt
- Margus Juhkam, Silberauto AS
Amount raised until today: 207 000 €
*Cap Table: In-depth document available upon the request
*PLEASE NOTE, more detailed revenue numbers are available upon the request (Cap table - due diligence file)
Rauno Sigur / Kentti Koppel / Valter Läll (72%)
Rauno Sigur has an outstanding experience in business. Among other things he was Cleveron´s Managing Partner in Japan, and has also founded an investment company. Currently holding the CEO position at DriveX
Kentti Koppel has over 5 years of experience in tech being long time worker at Net Group. Serving as a CTO in DriveX as well.
Valter Läll has great analytical background, having previously been employed by Swedbank and Net Group among others. Serving as a CPO at DriveX
Apart from the core team, DriveX has an outstanding advisory board, info below:
Competitors
Country: UK / Raised: 120 M USD to date / Product: Real-time AI for greater speed, accuracy, and end-to-end efficiency / Customers: Undisclosed / Growth: Undisclosed
Country: ES Raised: 7,4 M USD to date Product: Visual Intelligence: The power to change the insurance industry. Bdeo simplifies processes, automates decisions and strengthens the bond between insurers and their clients Customers: Undisclosed Growth: Undisclosed
Country: IS Raised: 7 M USD to date Product: AI Powered Vehicle Inspections. Click-Ins Visual Intelligence AI is the fastest and most accurate damage detection solution available. Customers: Undisclosed Growth: Undisclosed
Country: US Raised: 7.7 M USD to date Product: AI claims and estimates Customers: Undisclosed Growth: Undisclosed
What puts DriveX apart form the competition is flexibility and ability to customize. Compared to other competitors, DriveX can be customised on the granular level, which most of the listed above products can not do. The potential of the AI Marketplace is impressive and can be seen as one of the “killer features” in the future. The potential of automatisation is huge. Considering nowadays trend of product automation, DriveX is surely up there following it.
Also important: In case you check the listed above companies, you would see that Tractable is way ahead. Reason for this is early entry to the market + additional focus of actually calculating the cost damage established during the car inspection. This is an area, where DriveX is not going into just not as it becomes too tricky
General Ask: 1 000 000€ Convertible loan, giving away up to 16%
Commitments so far: Term sheet for 550k€ (Depo Ventures / Existing investors / Angels / Plug and Play)
Investment instrument: convertible note Valuation cap: 5 000 000 € Valuation floor: 2 500 000 € Interest rate: 6% common Maturity date: 31.12.2023 Minimum next investment: 500,000€
General Cap Table: 72% founders / 15% option pool / 12.5% investors
Runway: 13 months with gross burn, 22 months with net burnResolve
Funds allocation: 44% - new markets/sales/marketing 56% - Tech(automated visual damage detection and “build your own model”)
Burn Rate: ca. 30 000 €
Pitch Deck is HERE
