An app created by two brothers who got their start at Miami Dade College is receiving $18 million in investments from a group of high-profile investors, including Peter Thiel’s Founders Fund, SoftBank, and billionaire hedge funder Bill Ackman.
Lula, launched last year by Michael and Matthew Vega-Sanz, helps small and mid-sized car- and truck-rental companies manage their insurance needs.
The brothers, sons of Cuban and Puerto Rican immigrants, grew up on a small South Florida farm in the Horse Country neighborhood near Kendall. They attended Belen Jesuit Preparatory School before graduating from Palmer Trinity School and enrolling in Miami Dade College. They ended up transferring to Babson College in Boston, where they initially created a car-sharing app for college students that was thwarted as the pandemic bore down.
From that experience, they pivoted the app toward meeting fleet managers’ technology needs for more efficiently managing insurance concerns.
A meeting with PayPal alum and venture investor Lee Hower set off a series of events that led to the impressive roster of Series-A backers that also includes Silicon Valley-based Khosla Ventures, San Francisco-based Shrug Capital, Bain Capital Chair Steve Pagliuca, Canadian Andrew Wilkinson, and existing investors Florida Funders and Hower’s Nextview Ventures.
“When we moved back from Boston to build Lula here, everybody told us a generational company couldn’t be built in Miami,” Lula CEO & Co-Founder Matthew Vega-Sanz said in a statement. “It’s surreal to raise a round of this size, and to be building something that will revolutionize what is arguably the most important industry in our economy, but even more surreal is the thought that our story may inspire others in the Hispanic community to explore opportunities in tech.”
“The Lula team has accomplished more in the past 9-10 months than most startups do in 2-3 years,” Hower said in an email. “In working with Michael and Matthew over this past year as an investor it’s been great both to see the company emerge as an early insurtech leader in parallel with the Miami startup ecosystem starting to take greater prominence at a national level.”
In a follow-up interview, Matthew Vega-Sanz said the company is about to move into an 8,000-square-foot office in Dadeland, with plans to bring on about four dozen employees in the medium term. He said that while he knows of other Miami-based companies struggling to find software engineers, Lula’s connections to top-tier venture partners have created a pipeline of talent.
“So many people want to come to Miami,” Vega-Sanz said.
In an email, Miami-based Founders Fund Principal Delian Asparouhov said the Vega-Sanz brothers are part of a younger generation that has figured out how to utilize physical assets in a way prior generations have not. Asparouhov is also joining Lula’s board.
“We grew up in a shared economy world, where apps like Uber, GetAround, Airbnb, have allowed us to episodically utilize assets rather than purchase them outright,” Asparouhov said. “However, the insurance industry has not picked up on this massive shift.”
Asparouhov said Lula is able to solve for what is known as episodic usage, which is when an asset, like a car, is used on a regular schedule; and for instantaneous underwriting.
“Lulu is combining both of these technologies into an incredibly unique approach that digitizes insurance, that gives us flashbacks to how Stripe disrupted the digitization of payments,” Asparouhov said.
Saxon Baum, a vice president at Florida Funders, said the roster of Lula’s investors shows they are likely to become a highly valuable company.
“Their presence is going to be great for the state of Florida, and for Miami,” he said. “Hopefully in a few years we’ll be talking about how they are a ‘unicorn’ ” — tech parlance for a billion-dollar company.