Chuck Wallace on how HDVI is reshaping insurtech for freight and logistics
I'm Chuck Wallace, CEO of High Definition Vehicle Insurance company HDVI. My background is in innovative insurance in the auto space with Esurance and also connected vehicle technology, telematics, that type of stuff. My co-founder, Reed, who was an associate at 8VC before we started the company together, focused with 8VC on the investments they made in Innovative Logistics and Insurtech and such. We looked at the landscape of logistics and transportation and everything and said, What is a company that needs to be started in this space to address a problem that's not being addressed now? The answer that continually came back from the freight logistics and transportation industry said the big problem in this industry that's not being solved is around the insurance of the vehicles.
What we're doing at HDVI is we are rebuilding a commercial auto insurance company from the ground up around the technology and the data that we can get off of the vehicles. When you look at the large mega fleets out there with, you know, thousands and tens of thousands of trucks, right, they also have billions of dollars in revenue that come with those trucks. So with that, they have the capital to invest in advanced technology, small fleets. They don't have those kinds of resources. And again, fleets from 100 to 250 or from 1 to 250, 300 vehicles, they don't have all those vast resources. 5% of all the vehicles out there on the road in the 18-wheeler space are owned and driven by these large mega fleets, you know, fleets of a thousand, 10,000 trucks and larger. The other 95% on the road today are driven by the small to medium-sized fleets. People used to think that the freight logistics industry and these freight carriers were going to consolidate or no larger and larger fleets. But that's not actually what's happened over the last five years to the folks that really understand what's going on have changed their viewpoint to actually what's going to go on is you going to see more small fleets, more independent owner operators start. So what we do is we take all of what the big fleets are doing with the advanced telematics and everything we bring that, include it in the cost of insurance, we wrap our own software and services around that to make it really efficient to bring all of this technology and the information and everything to small fleets in a way that's really easy for them to incorporate into their business and digest. And in doing that, we're able to bring a lot more value to the fleets and help them not just with their insurance but become more efficient operations, become more compliant.
Why is there so much opportunity to invest in innovation in the freight and logistics space and such? Right. So let's take it from a high-level answer. It is a huge, multibillion-dollar, trillion-dollar space in the United States because it encapsulates a lot of different activity. There's the warehouses, there's all the trucking fleets that haul the goods, right? There's all the other things that go on. There's the financing entities that do freight factoring. There's insurance that serves it. If you understand the freight and logistics space and say there's all of this innovation, all this advanced technology, hardware, software, cloud, all that type of stuff that you can apply to create benefit and innovation and more efficiency in the freight and logistics sector and the various components of that. That's a real winner because it's massive, and there's a lot of opportunity to do that. And I don't think people are really focused on that.
When you look at the vast majority of folks that work in the freight and logistics space, folks in the warehouses, truck drivers, and so on, those are, you know, hourly employees, blue-collar folks, often entry-level positions, getting started, trying to build their lives, build their careers, build a better future for their families. So when you invest behind entities and everything that make those jobs better, make it more efficient for truck drivers to go out and start their companies themselves, that's really benefiting, you know, not just the economy in general, but those individuals and their families. Truck driving is the number one job in 30 states. There's five, six million truck drivers out there. When you help truck drivers like we do in our sector of the freight and logistics space, you help warehouse workers in another sector of the freight logistics space. You're helping folks, and you're helping, you know, folks out there in the economy, in the U.S., and you're helping them in a very major way. So there's a lot of human return on the capital as well.