Conference Transcript - RDZN 2026-06-03

Dylan Becker, Analyst — William Blair

Thank you, everybody. Appreciate it. My name is Dylan Becker. I'm the research analyst here who covers the vertical software space, but within that InsureTech Connected Operations. Oh, sorry. InsureTech and Connected Operations. We have Rohan and Sean Noel here from Rhodeson. Rohan's got a presentation that he's going to run through, and then we'll have a handful of minutes for Q&A at the end. But with that, I guess all of the necessary disclosures you can find at williamblair.com, the obligatory remarks there. But with that out of the way, Rohan, you wanna go ahead, thanks.

Rohan Malhotra, CEO

Hi, everyone. My name is Rohan Malhotra. I'm the CEO and founder of RoadZen. It's a company I started about 10 years ago. I'll start with a little story, right? My background is I studied robotics and AI Carnegie Mellon graduated 2010 I did my master's there and started building AI products for for fortune 500 companies right out of college and so I'd built a business that had US and India components I was traveling back to India in 2015 and my friend had an accident on the road and I was in the car behind him so I sent him in my car to the hospital before leaving he told me look can you go into the glove box and just you know file a claim for me the insurance papers are in there and so I went into his glove box his car was almost totaled then it took me about four and a half hours of making calls to the claims insurance to the claims department of the insurance company to the tow truck provider to the garage that would accept the car upon being towed and it was honestly one of the worst experiences and it just felt to me why isn't there any technology that's helping me in this situation because if i paid my premium it's to help me during this exact situation and that idea essentially became the genesis of road zen and i would say there are a couple of core thesis behind road zen we do ai for auto insurance and we have we think there are a few tailwinds here which make this a really exciting opportunity number one that ai will transform almost all of knowledge work and insurance is the best kind of knowledge work because every decision is made based on what we call historic data patterns and ai is exceptionally good at doing that the second thing is that the car itself is going to go from largely being a a mechanical product that takes you from A to B to becoming what is essentially like an iPhone on wheels. And you can get data out of it, you can get decision making out of it. And that changes the paradigm for the entire industry. We think that auto insurance, which is roughly a trillion dollar market, is gonna go from legacy first players. In the US, the average age of an auto insurer, a top 20 auto insurer is 95 years, digital first ai first players like road zen and we're here to give you the story of how we think we're going to achieve that um so in the insurance world you got to make four key decisions number one is how do i price this policy number two is how do i sell this policy how do i process claims number three when they arise number four i want to do all this and make money in the world of insurance that's called combined ratio it means if I collect $100 of premium how much did I pay out in claims in distribution costs in marketing in my own administrative costs of running the business and that's expressed as a percentage in the US average auto insurance is at a hundred and four percent combined ratio which means that they are losing four dollars on every hundred dollars of premium they collect and that has been the pattern over the last 10 years. And how do they make that up? They can reinvest the float and make some money on that. So that's how they cover up the difference. Now, what RoadZen is doing, we are making insurance a great operating business again, by reducing combined ratios, by making the car safer on the road, by helping on claims. So we've built a vertically integrated technology platform that's powered by over 300 AI models that intersect at various different parts of the value chain across underwriting or making the car safer on the claim processing on the administrative aspects of insurance and that's what we are continuing to build on a few highlights here uh you know as i said it's roughly a trillion dollar market roads and operates in the in us europe and india us is the largest market in the world europe is the most profitable and india is the fastest growing we think this is a great combination and it will allow us to build you know a very large business in a massive market rodzen has also an award-winning ai research lab we've been collecting data for the past 10 years we have proprietary data over 300 ai models that have been built by us and are now being used by some of the world's largest insurance companies car companies and fleets to make decisions it's also very important to understand we're not an insurance company ourselves we either act as a technology company selling our tech to insurers to fleets to car makers we have zero b2c component to the business we are an enterprise technology player or we act as a broker going through b2b to c channels to reach the customer so we'll partner with fleets we'll partner with oems to get the product across finally we have seen our revenues grow pretty pretty well over the last five years from about a million dollars a year last 12 months we've done 50 million of revenue and we have clear visibility to achieve 100 million revenue run rate in this coming year and we'll explain all of this in the next part of the conversation one of the other things i think super important to note is that while we act as a broker or a technology provider in the insurance vertical we never carry any underwriting or balance sheet risk on our own balance sheet. We always partner with insurers or reinsurers who carry the risk. So it's a business that is asset light, does not carry balance sheet risk. And we believe now that we built the technology can be scaled to a massive level. Auto insurance is a mandated product in almost every country in the world. It's a $900 billion market, one and a half billion vehicles on the road as of 2024. This is growing six to 7% a year. So this is roughly going to be a trillion-dollar market. RoadZen is building the leading company at the intersection of what we call AI, insurance, and auto, and we want to be the largest players in this space. Today we have 390 people across nine global offices. We are headquartered in San Francisco. We have offices in New York and San Diego in the U.S., London and Paris in Europe, and we have a pretty large technology and AI research team of data scientists, PhDs in India, almost 100 people that are part of our lab that build these AI models that we kind of work on the insurance vertical with. Here's exactly what we do. If you look at insurance today, it's kind of like the advertising industry in the late 90s or early 90s. Everything is done based on demographic profiling which is that how much premium should you pay is based on your zip code your gender your age and what's your credit score that's 95 of your premiums comes from that but 14 of drivers cause 63 of accidents on the road so 86 of drivers are essentially just subsidizing those 14 drivers what we are creating is a personalized real-time dynamic driver scoring methodology that gives you how you drive where you drive when you drive and augmented data around underwriting so it creates a highly personalized risk pattern that we think makes insurance way more profitable and allows our clients to have positive selection on their portfolio which we think is the best thing to do as an insurance company secondly since we are a broker as well we have licenses in 14 countries around the world we are licensed in the us in india and in your and pan europe so we can actually sell policies to any customer in the world through a single global technology platform collect the premiums in any currency and pay out a claim in any currency all of it in real time that allows the ability to scale the business globally the third thing we focus a lot of our energy on this insurers care about collecting more premiums customers care about just one thing which is what is going to be my claims experience and we've built the best claims technology stack in the world going from if you have an accident on the road just as your phone can tell you how many steps you walked in a day we can get the data from a car from an app on your phone or from cameras around the vehicle that allow us to say there's a potential accident here send you a push notification on your phone so you don't need to call someone it's completely proactive push notification says are you okay would you like to file a claim right now then ask you to take a 360 degree video off the car as you're taking the video our ai is acting in real time looking at the full video and saying this part is damaged and then making a repair or replace decision which then creates a real-time estimate of repair on the vehicle this process itself could take weeks with an average insurer we are doing it in under two minutes but we went beyond creating just the estimate we now have an erp for workshops which gives us access to real-time data into what are the parts available at the workshop are their bays open so they can repair the vehicle are there enough mechanics available so we can direct the car to a workshop that has you know a slot available mechanics available and the parts available and get it repaired with a guaranteed 48-hour turnaround and we are doing now three million claims annually without ever touching the car on our technology today which is one of the significant claims tech pieces in the world finally i think one of the key things we'd like to do is not just be reactive which is what insurance companies are i sell a policy i wait for something bad to happen is to be proactive and continuously exchange in in charge of the policy which is we're using telematics to not just reactively define the claim process but proactively engage the driver give them alerts so we have a division which is called drive buddy ai which is essentially a dash cam with an nvidia chip on it that allows us to in real time say that this driver may be falling asleep is about to enter into a collision we issue an alert three seconds a human driver needs 1.3 seconds before an accident to act we are roughly tripling the reaction time and we think over well we've proved over 4 billion miles of real world driving data a 72 percent reduction in the number of accidents using our technology and this technology has some incredible growth catalyst right now and we are scaling it on a global basis now one of the things i think insurtech 1.0 was all about what we call multi-line distribution businesses which is that I have John Noel as a customer. I'm going to sell him health and life and travel insurance and auto and bundle all of it together. Roads End, we don't do any of that. We focus on building the best technology company in auto and insurance and just focus on this one vertical, which is a trillion dollar market. All of this is powered by our AI research lab. As I said, there are 100 people in our lab. We are one of the founding members of the AI Alliance. And what we do in AI is very important because when you hear AI everybody today thinks it's about large language models but that's not what we do we build small models we call it enterprise intelligence models that do one thing with exceptionally high precision 95 to 99 percent precision because that's the only way you can deploy it at a large insurance company or a large car company and the way we do they do that is that we're gonna say this model is just for KYC of the customer this model is just for claims estimation this model is for anti-fraud detection during the claim process so singular models and we built over 300 models that essentially automate judgment and workflow inside of heavily legacy industry like insurance today we process now 4 billion miles over 20 billion claim 20 million claims Roadsden is the founding member of the AI alliance alongside uber meta service now nasa we were one of the 20 founding labs in the e-alliance rodzin was also anthropics launch partner one of a select few under 10 companies who were given early access to their managed agents platform to build agentic interfaces or headless interfaces around underwriting and claims in the insurance vertical and we are continuing to expand that partnership now we operate in almost all the large insurance markets globally we are continuing to expand we have licensing capability in all our markets and we act as a tech player in all the markets that we operate in now today we have about 4 150 global clients which includes 140 enterprise clients when i say enterprise clients that means it's a large car company a large insurer or a fleet above 1,000 vehicles that is using Rodezen's technology. Some of these players you will recognize like eight of the ten largest car companies in the world. Mercedes, BMW, Toyota, Volkswagen are clients of Rodezen. Five of the ten largest insurers like AIG Generali, AXA, Allianz are clients of Rodezen. And fleets like Supergas which is the largest LNG transportation fleet in the world a client of ours Amazon is one of our clients and we are continuing to build this client base on a global basis for car companies what we deliver is that car companies want to embed insurance products alongside the vehicle ownership experience being a regulated broker with underwriting capital behind us we can give them a licensed product that they can sell to to their customers, underwritten on our technology. And then when there is a claim, it comes back to their Toyota workshop, which is what they want. That's where they make money. For insurers, we give them the capability to underwrite with precision to process claims without fraud and do it much, much faster. For fleets, we work with them. Fleets want everything. They want their fleet to be safer. They want lower insurance premiums. Commercial auto in the US has gone up 7% to 8% annually for the last 10 years. And in the last four years, it's been the number one factor in inflation as determined by the US Economic Bureau. So auto insurance is becoming a real problem if you own a dozen fleets or more, and we are working to reduce that cost for our partners. As I said, we have two revenue lines in the business. The first is we sell our technology to our enterprise clients and we make a per transaction revenue. So you as an insurer, if you use the tech to process a new policy, we'll get paid $10 a policy. You use us to process a claim, you pay us $150 for every time you process a claim. If you're a fleet owner, you have 25 vehicles in your fleet, you pay us $25 per vehicle per month in that fleet. So there's 53% of our revenues are what we call technology or enterprise AI revenues that come through this transactional revenue. And all contracts of roads in a three to five year contracts, which gives us pretty good visibility over the next quarter, over the next year, and over the next three years on our business. Similarly, we have the digital broker or an MGA. an MGA is somebody who has been authorized by the insurance company to underwrite on their behalf so even though our balance sheet is not at risk they are giving us capacity to go out and say go and do 50 million dollars of business you can price the policy you can pay out the claims on my behalf and I'll audit you once a year that's what an MGA is we're an MGA in 14 countries around the world that gives us the ability to control this entire experience from selling a policy through to claims and we on commissions from my insurance partners which are roughly between 15% of the premiums to 35% of the premiums as revenue so those are the two revenue line items 53% today comes from technology and 47% from commissions as a broker now we grew revenues quite substantially over the last several years i'd like to talk about years 24 and 25. it was in september our year ends in march so when i say fy 24 it's april to march 2024 and the uk regulator we were doing 47 million roughly revenue at the time the uk regulator said that car companies when they sell insurance charge too much commission so if you're buying a bmw for a hundred thousand dollars your insurance could cost thousand dollars but the dealerships and car companies add on their commission on top of it and sell it for 2000 so they asked those guys to pause selling all insurance for two years alongside the purchase of a car that contributed roughly 29 out of 47 million dollars in revenue for roads and at the time our clients were the two largest car companies in uk uh so we kind of like got hit with a gut punch three months after going public we actually though it looks like the year was flat we lost 29 out of 46 million in revenue yet ended the year roughly flat and we have really picked up pace over the course of the last 12 months we our last quarter ended december was 14 and a half million revenues with a half a million dollar EBITDA loss so we are expanding the business and we'll be break even this quarter and we are continuing to grow the business from this point on we have said publicly that we will achieve over the next 12 months going from 14 to 15 million a quarter to about 25 million dollars a quarter of revenue that's about 60 to 65 percent revenue growth and profitability and we have great confidence in this projection because since April 1 we have announced $20 million in new revenue deals in the UK we got we signed nine different contracts worth 2.5 million dollars one contract with one of the top ten car makers in the world for a multi-million dollar contract for the UK insurance business in India we want a claims mandate from a top five insurer to manage one of their regions claims process that contract is worth at least ten million dollars annually they have eight hundred million dollars of claims we charge roughly six to seven percent on a per claim basis so just one regional contract is worth ten million dollars on that in the US we signed insurance capacity from a tier one insurer with a a rated carrier of about thirty million that should lead to about six to seven million of our additional revenues. So we are very confident if December was 15 million, March will be better than December. And since April, we have announced $20 million in new contracts. So we are very confident about a bridge to this $100 million or $25 million per quarter revenue and profitability from this point onwards. We got this data. We got some help from the Blair team. There are 90 companies in software land that are you know less than two billion in market cap but there are just three companies that are growing above 60 percent a year road zen is going to be one of them we have an incredible team a global team john noel who's our cfo he comes from one of the biggest three insurance brokers in the world i run the overall business we have us uk and india heads and an incredible board that supports the business we try to marry experience in insurance in ai research and automotive inside the company now with that i'll i'll leave you guys with with a few catalysts for the business we think the stock could materially re-rate at this point today roads and trades at a market cap of 160 million dollars or roughly 2x next 12 months revenue our drive buddy system has been mandated across India and Europe, the governments have said that every new commercial vehicle needs to have driver safety technology in them before they are sold, starting in April 2027. In India, RoadZen is the only company that has qualified the road testing, which is when they take your tech out for a spin inside a new truck, and they do it for four days, they bring 20 different drivers so it has to clear real world testing before they authorize you to sell this tech we are the only company there are 1 million new vehicles that will be sold in india next year commercial vehicles that require this tech to be embedded we charge 200 a vehicle that's about a 200 million dollar new revenue opportunity opening up for us next year we did the same thing in europe there are seven million vehicles in europe under a new law called eu 2144 which is coming up uh which are two so that's about a 1.4 billion dollar opportunity road zen is the only company in the world that has qualified road testing in europe and in india two of the major geographies for this new regulation um we were included in the russell index uh we're going to be added to the index at i think it's june 26 when the rebalance happens our market makers tell us that's about six to eight million shares of buying we think that will improve liquidity of the stock improve investor recognition and should be a generally a pretty positive catalyst for the company i also want to mention one interesting twist here you know and as that company trades at a value of 160 million we went we have a substantial india business which is about 50 of our global business we went to some of the best capital markets investors in india quant amc valentis advisors prime securities and they invested in our india subsidiary which is half of our business at a 280 million dollar valuation we still own 93 percent of india as nasdaq holders so we believe the stock is fundamentally under valued at this point finally i think the idea is we believe this is a business which will go from 50 to 100 million there are very few ai companies in the world that have 100 million of revenue very few still are profitable at that scale and very few of those have recurring revenues a lot of companies have 50 plus million of revenue in ai but those are pocs because every company in the world is giving you a five million dollar contract to try out here road zens revenue is 100 recurring in nature and directly linked to outcomes on the business so with that i'd like to thank you all for listening to our presentation and uh look forward to any questions thank you

Dylan Becker, Analyst — William Blair

perfect um thank you rohan i know we have room uh in the breakout i think we've got a couple minutes so maybe one or two questions uh to start very helpful context i guess if you could kind of give us a sense we walked through the market dynamics that are impacting insurers and the in the automotive ecosystem today, but kind of that network platform differentiation of your vertical integration, right? You're the only one who can see where the assets are, how the operator's behaving, what that means from a risk perspective and underwriting and how that actually gets solved from a claims perspective. If you dive into kind of the differentiation of that data set and why it's not something that's easily replicable or something where you see other competitors gonna try to do similar functions, if you will.

Rohan Malhotra, CEO

yeah i think so when we look at the competitive landscape there are people who just do underwriting products for insurance there are people like cccis who just do the claims but nobody has married all the data that you know the fleet safety feeds into the underwriting then the claims data feeds back in and creates a holistic picture and you control the whole outcome this has taken us 10 years to develop over billions of data points on the full outcomes of insurance so while you may say that there are competitors to road zen there are telematics companies out there there are underwriting ai companies out there there are claims management companies out there but road zen is very unique that we see the entire data from the entire value chain and it's the only way that you bring the combined ratio down there's no other way to do it if you underwrite something and and you don't know what the claims are doing, you're half blind, right? You really need to see the full value chain. And this is why we say that if the average auto insurer in the US is at 104% combined ratio, we have been operating in the sub 93% for the last six years. So we are 10 percentage points better than an average insurer. And in many cases, significantly better than that.

Dylan Becker, Analyst — William Blair

That's probably something that unlocks incremental investment and market share gains from those carriers that are utilizing your platform. I guess maybe for Rohan or Jean-Noel here just to bring you in as well too, very impressive kind of financial profile and kind of inflection that you've called to. The two segments of the business, I guess how you think about the mix shift happening or changing between the enterprise software side and kind of the MGA brokerage side, and maybe the unit economics of who you're selling into with the majority of the business kind of being, serving India today, but how that moves into North America, kind of the customer profile and what you're seeing there?

Rohan Malhotra, CEO

So about 50% revenues for us come from India. About 30% is now the US. US will become our biggest market in about 18 months. We are seeing tremendous growth here. Now, the macroeconomics are the most interesting thing from our perspective in this, because in India, an average auto insurance policy, there are more two-wheelers than four-wheelers. The average auto insurance policy costs $65. In the US, it's like $2,000, right? In India, we get paid $16 to $18 a claim. In the US, we get paid $150 a claim for doing the exact same thing on our technology. So not only is the US biggest market, but it's also the most profitable market. And we are seeing tremendous margin expansion, profitability expansion, as well as top line expansion as we are continuing to grow in the US market. So India, which is growing 70 to 100% a year, but as we continue to build out the U.S. market, we think in 18 months time, that becomes the biggest market or over 50% of our revenues.

Dylan Becker, Analyst — William Blair

Fantastic.

Rohan Malhotra, CEO

Sorry. I was going to agree.

Dylan Becker, Analyst — William Blair

Perfect. Well, with that, I believe we are at time. We will continue the conversation for those that have additional questions upstairs, but Rohan, Jean-Noel, thank you very much.