Our investment in Shepherd
If you walked onto any large-scale construction site ten years ago, you’d be hard-pressed to find any devices that connected to the internet apart from maybe a laptop or two plugged into ethernet cables inside a job site trailer. Flash forward to today, and there could be dozens of connected hardware and software products that help contractors collaborate, manage, and execute their work. Robots draw floor plans. Cameras on hard hats use computer vision to assess productivity in real-time. Tablets storing project plans foster collaboration. Technology is finally penetrating one of the largest industries in the world.
While advancements in construction tech have helped make projects safer and more efficient, risk management for the construction industry hasn’t kept up. Construction is a dangerous and unpredictable industry. For a given construction project, there are several factors — working conditions, weather, blueprints, materials, equipment, and more — that make it difficult to predict outcomes. Mix this with a growing number of stakeholders — general contractors, subcontractors, owners, architects — and the complexity of a project increases exponentially. Anything could go wrong at any time, making it difficult to manage risk. As a result, insurance plays an outsized role in the construction industry compared to other sectors.
Yet, despite being the backbone of the construction industry, insurance has been slow to digitize. Buying insurance policies for commercial construction is a slow, multi-month application process powered by emails, phone calls, and paper forms sent back and forth across brokers, their clients, and insurance carriers. Getting a quote for a policy can take anywhere from 30 to 90 days. Underwriting models, which evaluate and price insurance policies, have failed to incorporate new sources of data that could make them more intelligent. To compound this problem, insurance premiums have dramatically increased in the past few years as insurers react to large losses sustained by the market as a whole.
Why hasn’t the backbone of the construction industry transformed to match the new tech-powered state of the world?
Enter Shepherd. I’m thrilled to announce our Seed investment in Shepherd, a digital platform for commercial construction insurance, and join the company’s board. Shepherd’s software workflows enable brokers to provide a digital purchasing experience to their clients, decreasing policy submission turnaround times, reducing errors, and drastically improving the customer experience — all at no cost to brokers.
Starting with Procore, contractors can integrate the tools they already use with Shepherd, eliminating hours of work spent reproducing internal data on insurance applications. Shepherd’s smart underwriting models leverage new sources of data to better understand, predict, and price construction risk. In an industry where managing risk is of the utmost importance, Shepherd provides critical insurance infrastructure that rewards commercial construction organizations for investing in technology that makes them safer.
When we first met the Shepherd team, we were struck by both their expansive vision for the future and their trifecta of backgrounds across construction, insurance, and tech. CEO Justin brings deep expertise in building software for construction workers as the founder at TradeTapp, which was acquired by BuildingConnected and later Autodesk where he led Risk Strategy. CTO Mo brings deep expertise in building seamless, data-rich product experiences from his time leading teams at Airbnb. Chief Insurance Officer Steve brings over 15 years of underwriting experience in construction casualty from his time at public insurance giant Chubb where he led the North American Construction Industry Practice and managed underwriting for $1B+ in premiums. Together, they form a unique trio — not to mention they’re also insanely sharp, humble, and fun to work with — with a bold vision to make the construction industry safer and more sustainable through innovative insurance products.
We couldn’t be more excited to partner with Justin, Mo, Steve, and the entire Shepherd team, and a stellar group of co-investors, including Procore, Susa Ventures, Y Combinator, Greenlight Re, Oldslip, AirAngels, and individuals like Sam Hodges (Vouch), Phil Edmunson (Corvus), Ty Harris (Openly), Chad Nitschke (Bunker), Joe Schmidt (Ethos), Spike Lipkin & Gordon Wintrob (Newfront Insurance), John Alicandri (Hunters Roberts Construction Group), Mike Curtis (Airbnb), and more.
If you’re excited by Shepherd’s vision for the future, we’re hiring! Come join us.