Snapsheet receives $22 million funding for its app to help drivers file car crash claims
【Summary】Chicago-based startup Snapsheet raised a new round of $22 million funding on Oct 14th, to fuel its expanding business of helping drivers file car crash claims a lot faster and easier.
Chicago-based startup Snapsheet raised a new round of $22 million funding on Oct 14th, 2016. This was done to fuel its expanding business of helping drivers file car crash claims a lot faster while hopefully making it a bit easier.
The startup's Series C funding came from big names in the insurance world. The fund was led by F-Prime Capital and IA Capital Group. And it was joined by strategic backers Fosun Insurance Group, Liberty Mutual Strategic Ventures, Intact Financial Corp. and USAA. After the newest round, the company has collected a total equity funding of $31.25 million in seven rounds from almost a dozen investors.
The company, previously known as BodyShopBids, is a free app for iPhone, Android and the Web that allows users to receive bids from local auto body shops. A driver can file a brief vehicle damage report with photos to the app, and at least three nearby body shops will provide certified estimates for repair costs, bypassing insurers.
However, such business models didn't prove effective, or at least profitable. Around 90% of the people who encountered car crashes would rather leave their insurance company to deal with the issue. The company burned through $1 million in 2012 while marketing the app and was on the brink of disaster. Then they quickly changed strategy to cooperate with insurers.
Using the app, claimants can snap a photo of damage on their phone and send it to their insurers, then get the claim amount paid into their account by direct deposit. This also takes the estimators out of bodyshops and makes the system more centralized and accurate in an industry where cutting even a little fat out of the deal has huge implications. The company claims that it takes an average of only 2.5 days to close a claim. Snapsheet's revenue tripled to top $10 million, with half of the sales due to supplemental products, totally upturning the company's situation.
The company now mainly provides services in Chicago area, but has plans to expand to major US cities soon, and will even start selling its software in Asia, Europe and South America. It has been working with new insurance carriers like MetroMile and Turo, and serves 35 corporate clients so far, including USAA, MetLife and Hartford, according to a company statement.
After raising up the new round of money, Snapsheet said it will use the financial resources to hire more people in areas including engineering, marketing and sales. Right now, more than 250 people work for the company. And it will also start licensing its virtual claims processing technology including its full virtual customer relationship management (CRM) suite and various self-service applications directly to insurance carriers.
Snapsheet's cofounder and president C.J. Przybyl told TechCrunch that although software like Snapsheet's could be put to use to help other insurance providers analyze damage to homes or other property, auto claims represent such a huge market, that the company won't seek to expand beyond autos.
"Insurance tech is winner take most for players that really stay focused and understand how important customer service is," he said.
Claire Peng has over 6 years of professional experience in the media industry, covering TV, newspaper and online media. She was once a reporter and producer for Fairchild Television based in Toronto Canada, and worked as an English news reporter for the Global Times in Beijing. She writes mainly about self-driving, companies investment, and the enterprise lab.
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