Ubiquity Founder: Sergey Litvinenko of Koop (insurance, compliance, and security for DeepTech companies)
Learn how Koop founder/CEO Sergey learned quickly from customer demand from DeepTech companies to arrive at the insurance/compliance product they offer today.
Today we spotlight a founder who leverages software beyond the screen to transform an industry. As always, each Ubiquity founder has their own nerdy background (we define nerdiness as having a deep obsession) that led to founding their startup.
Meet Sergey Litvinenko, CEO & co-founder of Koop, a customer assurance platform helping DeepTech companies navigate the complexities of security automation, regulatory compliance, and business insurance in one place. Ubiquity Ventures led Koop’s pre-seed financing round in late 2021.
Can you sum up what Koop does in one sentence?
Koop enables the commercialization of DeepTech companies by consolidating compliance, security, and insurance into one seamless platform
Tell us more about Koop’s product.
Our product starts with the customer's frustrations. If you're an early-stage DeepTech company, you’re subject to customer, partner, and even investor requirements. These requirements come down to having the right security measures, the right compliance frameworks in place, and the right insurance policies.
It's all about protecting you as a company, and today the way to satisfy these requirements is fragmented and quite costly, which puts a burden on any early-stage operation. For example: to achieve SOC 2 compliance, you have to work with 1-3 different vendors, and it can cost $25,000-$100,000 per year. Security can easily take hundreds of hours away from your team. There’s also insurance, which is another 1-3 vendors and costs $20,000-$40,000. The worst thing about this is that none of these things talk to each other; you do compliance, and then the same information is needed for insurance, and you need to do it all over again.
Our product consolidates compliance, security, and insurance into one. We make them run off the same database and the same knowledge base, which makes it easier and cheaper for tech companies to satisfy customer, partner, and investor requirements. You can manage your contractual requirements, get your SOC 2 or ISO 27000 done, and get your general liability, errors and omissions, and cyber all in one place at a fraction of the time and cost compared to doing it all with multiple different vendors.
What is the story behind the founding of Koop?
Getting from the very first idea to where we are today has been quite a journey. Originally, we sought to build a machine learning-powered dash camera that any driver in the United States could put on their car. That camera would be able to identify traffic violations on the road and automatically issue driving tickets, and people who catch bad actors would get a cut of the ticket - like a decentralized traffic safety system.
At the time, one of our co-founders was working in the self-driving space and realized that self-driving would actually solve the problem of traffic crashes and traffic fatality. We looked into how our original concept could be used with self-driving car data, and then started to work on how we could take data off of autonomous vehicles and use it for safety analysis.
We realized that a great use case for our analysis would be insurance - not only protecting the self-driving car companies themselves, but also just having a good understanding of the environment and how other people are behaving. We went on to talk to the insurance companies about what didn't really work well, and it led to the current iteration of Koop. We had a decision to make between whether we wanted to stay technical and try to sell to the insurance companies or build an insurance operation ourselves. We decided to build an insurance operation which is where Koop is today.
It has been non-trivial, it has been a maze, and every time we made a turn it was backed by evidence that we discovered about the market.
How did you notice the need for this insurance technology?
We determined that we could take data - the video data and the telemetry data about the vehicle itself - from vehicle companies and analyze it for vehicle performance and the surrounding environment. The idea was that if the autonomous vehicle drove around the city all day long, we could analyze other actors on the road and the AV itself, and it would give us a good idea of what was going on in the city.
We tried to sell this to insurance companies as a software-as-a-service product, and they liked it, but our potential customres had no underwriting model to ingest it. Our analysis didn’t connect to dollars for them, and we realized that they weren’t ready technically. We thought the market was at the stage where this would be hot potatoes in a couple of years, and we made a decision to launch our own insurance operation.
We started insuring the companies that develop self-driving technology and robotics in general. As we started doing this, we stumbled into this situation where insurance wasn’t just about protection and safety, but also about contractual compliance. This was apparently a big hurdle for robotics companies, and that became a part of our pitch: if you're a robotics company - or now any deep tech company - and you want to make your customers happy, you need to get insurance to protect yourself and satisfy the requirements that your customers impose on you.
The problem that we discovered is that when a great technology comes around, it's not enough that you have a very well-performing product. You also need to take care of so many other things, and insurance and compliance are those things that you don't really think about. It can also be extremely expensive. Our job is to make it a lot cheaper and simpler for companies to commercialize by taking care of insurance and compliance.
We think of nerds as people who are obsessed with something. What are you nerdy about or obsessed with inside & outside of work?
At work, I've been very much obsessed with product marketing recently; how do you communicate your product to customers so attractively that they cannot say no? What drives me is that when I look at our sales pipeline of prospective customers, every single company should be a customer of Koop!
There are certain challenges and friction points that prevent people from signing up, and I think it all comes down to product marketing. Communicating your product so clearly that people get it and they love it and sign up for it is both art and science. I've been spending all of my time on this, and I love it.
Outside of work, I’m geeking out on AI tools, especially the coding tools that turn your written product requirements into code. I'm a modeler, not a programmer, and even without having the coding background, I can still turn product requirements into actual tools that I can host and that can be used, and that's game-changing.
One thing that my co-founders and I totally geek out on is self-driving cars. We were the first to support a student-led autonomous Indy 500 competition in Indianapolis in 2021! It later became a league with major sponsors. The photo below shows us in front of our supported autonomous race vehicle (worth $1.1M) that can go 200 mph with no driver.
What would you tell your past self if you could give them advice?
Do things faster. Whether it’s the product or fundraising, the more you do and the more you iterate, the higher the likelihood that you're going to succeed.
Action produces information; you take that information, you adjust your action, and the more iterations you can go through, the higher your chances of landing on something that works out. Do things faster!
What’s your advice to budding technical founders who haven’t yet taken the leap to launch their new company?
Study product marketing. Even the best, most technically beautiful product in the world won't sell itself. You need to connect a product to the end user, and you need to figure out how to do it so well that it becomes impossible to say no.
Whether you're a modeler, a programmer, or a hardware engineer, if you are at the helm of a company, product marketing is one of the few things you cannot escape. You have to own it, so I would recommend doing that earlier rather than later.
Ubiquity Ventures — led by Sunil Nagaraj — is a seed-stage venture capital firm focused on startups solving real-world physical problems with "software beyond the screen", often using smart hardware or machine learning.
If your startup fits this description, fill out the 60-second Ubiquity pitch form and you’ll hear back shortly.