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Magma Partners and LEAP Global Partners Invest US$1.2m in Mexican Insurtech ARCA

30 July 2020
Magma Partners and LEAP Global Partners Invest in ARCA

Magma Partners and LEAP Global Partners invested US$1.2m in ARCA, a Mexican insurtech marketplace focused on car insurance, with participation from insurance company Grupo Peña Verde.

(Contxto) In Mexico, insurance is viewed as costly and filled with confusing jargon. So the natural thing people do is not have insurance at all. Fortunately, there are startups who are working to disrupt this market and raising the funds for it.

Mexico-based insurtech ARCA recently closed a seed round for US$1.2 million through Magma Partners, LEAP Global Partners, among other investors.

Juan Manuel Gironella, co-Founder and CEO at ARCA told Contxto the funds will serve to improve the user experience.

“We want you to not only manage all your insurance policies on our platform—regardless of whether you acquired it with us—but also receive all information about your car in one single place: notifications for driving infractions, verifications, and more,” says Gironella.

The startup is geared towards coverage for your car. Nonetheless, it has a deep understanding of the overall insurance industry’s pain points. And it’s something I wish to see reflected more of in startups working with other types of insurance policies.

Why won’t you leave me alone?!

I’ll admit I don’t like talking to insurance brokers of any sort.

They’ll bombard you from every which way to assure you that their policy and company is looking out for your best interests, while the competition only wants your money. It’s the same speech every time… just with a different coating of paint.

So to compare and contrast options, you’d have to call every insurance company, present your case, and personal data. Then sit back to listen to each broker’s pitch.

In the meantime, your inbox is being flooded with insurance quotes, publicity, and so on.

“We asked ourselves, ‘if nobody likes being called by salespeople, why is it still like this in the insurance industry?’ In other words, with the current model, it would appear the road ends once you’ve bought car insurance… but that’s where it begins!” observed Gironella.

Moreover, the nightmare continues even when your car is covered.

Even when you’ve got insurance, every company has its own portal and sign-in process, so retrieving data (e.g. when the policy expires) can also be a real pain in the you-know-where.

The process entails a lot of time and patience, neither of which is in abundance in most cases.

In that sense, it’s easy to understand the value of ARCA’s service when it comes to car insurance.

Insurance startup ARCA

Through the insurtech’s platform, users can simultaneously compare and contrast car insurance policies with different purveyors and then buy a policy online. A few clicks and you’ve got coverage for your vehicle and you can manage it in one single place.

Despite the rise in digitization, ARCA faced some non-believers.

“Interestingly, when we launched our platform, people within the industry told us ‘customers in Mexico aren’t ready to buy insurance online,’” recalled the startup’s CEO.

“[But] our customers are demonstrating that it’s the industry that isn’t ready for customers to acquire insurance online,” concluded the Executive.

But one of the startup’s investors, LEAP, identified further motives for contributing to its growth.

LEAP Global Partners was impressed with how scalable ARCA’s solution was and how it operated both as a B2B and B2C. Moreover, the venture capital (VC) fund acknowledged the ARCA team’s potential given its expertise in the insurance industry.

Juan Gironella and his sons, Juan Manuel and Javier, co-founded the startup in 2013. Together, they have an extensive background after having worked for large insurance companies like Mapfre and Zurich.

They know the ins and outs of the business, but more importantly, the pain points when it comes to the market in Mexico.

Through a digitized approach, insurtechs, VCs, and insurance companies alike hope for better market penetration in Mexico.

Magma Partners and LEAP Global Partners Invest US$1.2m in Mexican Insurtech ARCA was last modified: August 5th, 2020 by cramos
ARCACar InsuranceGrupo Peña Verdeinsurance policyInsurTechLEAP Global PartnersMagma PartnersMexicoVenture Capital
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