When Itai Ben-Zaken’s First Startup Failed, He Learned a Valuable Lesson
Itai Ben-Zaken’s first startup, Comprendi, failed in 2018 after five years of operation. The former BCG consultant and Wharton MBA spent months analyzing his major decisions to understand what went wrong. Upon reflection, he concluded that trying to operate in a market dominated by two giant players, Google and Facebook, was the primary mistake.
A New Approach for His Second Startup
When Ben-Zaken started exploring founding his second startup, he made a conscious effort not to repeat the same mistakes. He looked for a business opportunity in a fragmented market with many competitors, which eventually led him to build a company offering property and casualty insurance for landlords and condo associations.
The Attractive Market for Landlord Insurance
Ben-Zaken chose this industry because it was still largely untapped by major players. The largest carrier in landlord insurance, Travelers, represented only about 7% of the market share. This meant that there were ample opportunities for a new entrant to establish itself and gain significant traction.
Experience in the Insurance Industry
Before starting Comprendi, Ben-Zaken had spent four years running Insurance.com at QuinStreet, an operator of white-labeled financial services marketplaces. His experience in the insurance sector gave him valuable insights into the industry’s workings and helped him identify areas for innovation.
The Birth of Honeycomb Insurance
Ben-Zaken launched Honeycomb Insurance in 2019 with a vision to revolutionize the landlord insurance market using technology. He spent two years developing the company’s computer vision and AI-driven property "inspection" technology, which uses aerial photographs of building roofs to eliminate costly physical inspections.
AI-Driven Property Inspection Technology
Honeycomb’s AI relies on machine learning algorithms that analyze aerial images of rooftops to identify potential risks and damage. This innovative approach enables insurers to offer more accurate quotes and reduce the risk of claims disputes.
Raising Funding for Expansion
In early 2022, Honeycomb raised a $15 million Series A funding round, which helped the company scale its operations and expand its offerings. The new investment also enabled Ben-Zaken to increase his team’s size, with plans to double it from 90 employees to 180 over the next 18 months.
The $36 Million Series B Funding Round
Recently, Honeycomb announced a $36 million Series B funding round led by solo venture capitalist Oren Zeev. The investment also included participation from new investors Arkin Holdings and Launchbay Capital, as well as returning backers Ibex Investors, Phoenix Insurance, and IT-Farm.
Oren Zeev’s Expertise in Insurtech
Zeev is a seasoned investor with extensive experience in the insurtech space. He holds significant stakes in Next Insurance, Change Healthcare, and other prominent companies in the industry. His involvement in Honeycomb’s funding round brought valuable insights and expertise to help shape the company’s future growth strategy.
A Strong Partnership for Future Growth
Ben-Zaken and Zeev’s partnership marks a significant milestone for Honeycomb as it prepares to expand its operations and deepen its market penetration. With Zeev’s guidance, Honeycomb is well-positioned to become a leading player in the landlord insurance market, leveraging AI-driven technology to provide innovative solutions for customers.
The Future of Insurance: Tech-Driven Innovation
Honeycomb’s success story highlights the importance of embracing technological advancements and innovation in the insurance sector. By harnessing the power of AI and machine learning, companies like Honeycomb are poised to revolutionize the industry, making it more efficient, customer-centric, and risk-aware.
The End of a Failed Startup, The Beginning of a New Era
Ben-Zaken’s experience with Comprendi served as a valuable lesson in understanding market dynamics and the importance of innovation. His subsequent success with Honeycomb demonstrates that even in failure lies an opportunity to learn and adapt, ultimately leading to future triumphs.
Conclusion
The story of Itai Ben-Zaken and his journey from a failed startup to a successful entrepreneur offers valuable insights into the importance of learning from mistakes and embracing technological innovations. As the insurance industry continues to evolve, companies like Honeycomb are poised to shape its future with AI-driven solutions that will make it more efficient, customer-centric, and risk-aware.