As business screeched to a halt during pandemic, two entrepreneur brothers shifted from car sharing to insurance
MATTHEW and MICHAEL VEGA-SANZ, 26
As they were growing up, a career in technology was never in the picture for Matthew and Michael Vega-Sanz, 26-year-old twins now running one of Miami’s hottest tech startups.
The brothers did everything together, playing outside with chickens, goats and ponies on a small family farm in the aptly named Miami-Dade neighborhood of Horse Country, not indoors on video games. They were good students, played basketball and initially attended Miami Dade College before transferring to Babson College within a year, focused on pursuing Wall Street careers.
In Boston, the brothers were introduced to the world of tech. They met students who taught themselves how to code and were building startups; they could see themselves doing that, too. “In athletics, a lot of your success could be predicated on some sort of supernatural ability, but when it comes to tech, as long as you had internet and a computer, it’s essentially a level playing field,” says Matthew. And with technology, they could solve big problems that everyday people were facing, says Michael. “I thought that was much more meaningful than chasing dollar figures on Wall Street.”
The brothers, whose parents are from Cuba and Puerto Rico, founded Lula to enable college students to rent cars to one another. They went to tech meetups and asked a lot of questions. After months of development, they dropped out to pursue the car-sharing app full time in 2018, both thinking it would only be for a semester or two until the app became “self-serving.” “I was naive because anybody with a startup knows it will never be selfserving,” Matthew says.
He recalls the day they launched the app beyond Babson on Sept. 1, 2018: “I told my mom if we expand to 25 campuses in year one, I’ll be happy.” Within the first five months, Lula had members on more than 500 campuses nationwide. “People would see the company, and they thought it was this big, sophisticated company. In reality, it was just two kids out of a living room.” The brothers relocated to Miami in 2019.
While the site gained tens of thousands of users, the path to profitability wasn’t clear until the brothers created the insurance infrastructure software for their business.
When the pandemic shut college campuses down in March 2020, Lula’s business was toast. “Matthew and I put our cars up for sale so we could make payroll, and then we got about $20,000 or $30,000 in PPP money, and that was gone in less than 90 minutes. Then I gave away my stimulus checks as well. The bank account had negative $2,000, and we had creditors calling us.”
They considered trying to sell their car-sharing app software but kept thinking about their Lula office sign, one they still have in their Miami-area headquarters. “We knew if that sign came down, it would mean the business would be dead,” Matthew says. “Michael and I would go into our office every single day and put our heads together and think: ‘How can we keep that sign up?’
Around that time, a car-sharing service for military bases inquired about licensing Lula’s insurance infrastructure technology that enabled car sharing and rental businesses to only pay for insurance when their vehicles are actually in use — known as episodic insurance — and managed insurance processes. That generated some revenue, but the founders also believed they had something special in that insurance tech they built that could help them evolve their business model. “College students were the riskiest demographic, and we had the lowest accident rate in the industry,” Matthew says.
Soon after, Matthew and Michael began focusing exclusively on the insurance tech and making their tools accessible to other shared-mobility companies through an API (application programming interface).
Lula’s revamped website launched in early 2021. Within weeks, 1,600 car-sharing and vehicle-rental companies signed up for the waitlist. To expand, the founders last summer raised $18 million in venture capital from Founders Fund, Khosla Ventures, SoftBank, Florida Funders and others.
In 2021, business grew about 400%; Lula expects 500% to 600% growth this year. In a year, Lula went from employing a handful of people to about 50, and this summer expects to employ 60, including an experienced executive team, Matthew says.
Lula now is launching a product for the trucking industry, where insurance is expensive. Truckers are required to pay for 365 days a year of coverage, when the average trucker is only on the road 220 days. What’s more, owner-operators don’t want to have to worry about vetting drivers, organizing policies and managing claims. Lula’s API provides for all that, including episodic coverage.
The startup is eyeing e-commerce next. For the thousands of business owners who sell their wares on websites like Etsy or Shopify, refunding $200 for an order lost or damaged in shipping, for example, is a high price to pay, Matthew says. Lula could provide access to insurance for a couple of bucks on every checkout screen for buyers who might want to save time and hassle trying to get a refund if necessary.