Snapsheet lands $10 million from new investors
David Bauer
Snapsheet has put another $10 million in the tank to fuel its effort to automate the claims process for car insurers.
The Lightbank-backed startup, previously called BodyShopBids, shifted gears a year ago from a consumer-focused company to one that partners with insurers. It originally targeted consumers with a mobile app to take pictures of their wrecked cars to get repair bids from body shops. But the company realized that the bulk of auto-body repairs involve insurers, rather than individuals paying out of their own pockets.
Since then, it's lined up several insurance companies, including Farmers Insurance Group, USAA, MetLife Inc. and National General (formerly GMAC). But the company ultimately wants to land the big boys of the business, such as Bloomington-based State Farm Mutual Automobile Insurance Co., too.
Snapsheet, headed by co-founder Brad Weisberg, imported industry veteran David Bauer from San Francisco last spring to be chief operating officer. He previously was chief information officer for auto-salvage giant Copart Inc.
The new funding was led by several private investors, which the company did not name but described as having strategic ties and/or experience in the insurance industry. Existing investors include Lightbank and Chicago-based venture funds OCA Ventures and Pritzker Group Venture Capital. Snapsheet raised $1 million in early 2012.
The company will use the money to add repair estimators and support and sales staff as well as improve its technology, Mr. Bauer said.
ADDED EMPLOYEES, SPACE
Snapsheet already has grown to 50 employees from about seven in less than two years. It expects headcount to reach 60 by year-end. The firm recently increased its space at 600 W. Chicago Ave., where Lightbank also is housed, to 20,000 square feet from about 5,000.
Because the company pays for repairs upfront and then collects reimbursement from insurers, it also needs working capital. Snapsheet charges insurers a flat fee per claim, rather than a percentage of the repair costs, which Mr. Bauer said is a unique advantage.
Snapsheet has made inroads into the business, landing several big insurers. Mr. Bauer said he expects to sign up four more of the top 20 carriers soon.
But it will need to keep bulking up and prove it can handle a lot more volume to land the largest insurers, some of which, such as Northbrook-based Allstate Corp., are developing their own technology.
Snapsheet is on pace to handle about 50,000 claims annually and plans to hit a rate of 200,000 to 300,000 next year, which would allow the company to crack the top 10 in claims processed and become cash flow-positive, Mr. Bauer said. Such volume is a drop in the bucket compared with State Farm, the industry giant, which handles about 7 million auto-repair claims annually.
After 30 years in the industry, Mr. Bauer knows as well as anyone the challenges facing Snapsheet.
"We have to get to scale," he said. "The biggest challenge is we have to show we can do it better than the insurance carriers. I believe we can do that."
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