Two rival Boston-area startups trying to remake the auto insurance industry are joining forces. Cambridge Mobile Telematics said Wednesday it has acqu

Boston startups merge to create driver-tracking giant for the auto insurance industry

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2021-06-17 14:30:07

Two rival Boston-area startups trying to remake the auto insurance industry are joining forces. Cambridge Mobile Telematics said Wednesday it has acquired TrueMotion to create a leader in the field of tracking driver behavior to help set insurance rates.

Terms of the deal weren’t disclosed, but the acquisition was valued in the hundreds of millions of dollars, according to a source familiar with the transaction.

The combined company will employ about 400 people and provide telematics services to 21 of the 25 largest auto insurers in the United States. If Cambridge Mobile continues to grow, it would be on track to go public or perhaps be acquired by a larger tech or insurance firm in the next few years.

Both companies’ core products are apps on smartphones that use the sensors in the phones to collect data about how people are driving, such as whether they are speeding, frequently braking hard, or picking up their phones to text when they should be paying attention to the road.

Auto insurers are racing to offer policies that track customers’ actual driving patterns, relying on technology from companies such as Cambridge Mobile, TrueMotion, and Arity, a five-year-old startup created by Allstate. Typically, auto insurance customers can pay lower premiums in exchange for agreeing to the rather intrusive monitoring.

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