James Blackham and Callum Rimmer co-founded By Miles after they met working at Goldman Sachs
After launching to the UK public last week, By Miles has announced that it has closed a £1m funding round led by JamJar Investments, the venture capital fund of the Innocent drinks founders.
Original investors also participating include InsurTech Gateway, the insurance-focussed incubator set up by investor Hambro Perks and Lumleys, and InMotion Ventures, Jaguar Land Rover's venture capital fund.
By Miles charges car owners a fixed annual fee to cover their cars while parked and then bills them monthly, based on the number of miles that they actually drive.
The product, which measures miles in real time, is being aimed at drivers who travel under 7,000 miles a year or 140 miles per week in their cars, making it perfect for city dwellers, occasional drivers and people that mostly drive at weekends.
It will also reveal to motorists the true cost of car journeys, allowing car owners to decide whether or not to take their vehicle, with potential benefits for the environment and public health.
The pay-as-you-drive insurance, likened to mobile phone billing, could help drivers make substantial savings each year as the cost of motoring and car insurance continues to climb.
Charging for the distance travelled is also a fairer way to charge motorists for insurance, as drivers increasingly mix modes of travel including public transport, bike and walking.
Annual charges start at £150 a year and driving is billed from 3p a mile. Using this example, someone driving 4,000 miles a year with this policy would pay £270 for a year’s fully comprehensive cover.
The less they drive, the less the car owner would pay. As with traditional motor insurance, rates will vary according to the model and age of the car, driver’s experience, and where the car is parked.
To get started, customers simply plug the matchbox-sized Miles Tracker device into their car, which will accurately measure the distance travelled and automatically relay it to a smartphone or computer within minutes of a journey being completed.
The company only prices its policies based on how far a car is driven, not how it is driven.
This sets it apart from many existing black box products that often score drivers on their braking, acceleration and speed to change the price of their insurance.
Potential customers can get a quick idea of their quote in less than a minute and the fully comprehensive policy includes No Claims Discount protection, personal accident cover, courtesy cars, uninsured driver cover, misfuelling cover and replacement key cover - items that drivers normally pay extra for.
The By Miles smartphone app also gives drivers other reminders and tools to help make owning a car much easier, including MOT and Car Tax reminders, ‘Find My Car’ and ‘Car Medic’, a diagnostics tool that scans your car for mechanical issues and error codes.
James Blackham, co-founder and CEO, said: “We started By Miles two years ago because we believed drivers like us were being charged way too much to insure cars they rely on but don’t drive that often, so we built a simpler and smarter way of pricing car insurance.
“Following our recent launch, this new round of investment means we can continue to improve the features in our app, making car ownership even easier for people that don’t drive much.”
Jon Wright, co-founder of JamJar Investments, said: “As soon as we heard about By Miles, we knew we wanted to get involved.
“Although car insurance is not exactly a purchase everyone looks forward to making, the team at By Miles are changing that: their pricing is smarter, their customer service better, and their app gives you useful driving tools as well as a policy with added benefits.
“They’re set to shake up the car insurance market.”
Blackham continued: “It’s fantastic to welcome JamJar Investments on board to join us on the journey.
“Their experience in creating a product that’s all about honesty, integrity and putting customers first - as well supporting a range of businesses that are doing the same across many different industries - has already proven invaluable.
“We’re honoured that both InsurTech Gateway, InMotion Ventures and a number of our other investors have also reaffirmed their commitment to us in this round, as we push forward with our goal to make car insurance better for lower mileage drivers.”
Our BQ Bulletin emails will land in your inbox at 7.30am, Monday to Friday, with a mix of the latest local business news, national news, and features to inspire you. Sign up here!
Click here to read our privacy statement