With a huge financial backing in place, a Glen Allen startup continues to muscle its way into the insurance industry.
Over the past six months, Comparenow – a car insurance comparison website headed by former Elephant Auto Insurance chief executive Andrew Rose – has added employees, office space and new investors.
It’s also expanded its list of insurance carriers while increasing its presence to 45 states. And launched the beginnings of what will be a big money ad campaign to help it find its place in the competitive insurance market.
“The last several months have been very good to us,” Rose said.
Comparenow in January announced an investment by White Mountains Insurance Group (a publicly traded firm that formerly owned esurance) and insurer MAPFRE USA. Terms of the deals were not disclosed.
White Mountains now owns 21.1 percent of Comparenow. MAPFRE owns 11.1 percent. Admiral Group, the parent of Elephant Auto that tapped Rose to lead the launch of Comparenow, holds a 67.8 percent ownership in the new company.
That capital helped the company, which is looking to become the Kayak.com for auto insurance, unroll its first advertising push in California. It hit the airwaves in January with 11 television ads created by swarm of ad agencies. Last week, it started running ads in several markets in Virginia, including Richmond.
The company has not disclosed the exact size of the war chest it’s working with, but Rose said it’s a backing beyond eight figures.
“We have raised enough money that will allow us to do hundreds of millions of advertising in the coming years,” he said. “This is a business we knew had to be well capitalized to succeed.”
Comparenow has added six employees since September and now has a headcount of 28 at its 6,000-square-foot office in Glen Allen. And with about half a dozen openings to fill, the company leased an additional 3,000 square feet in an adjacent office in its building. That new space is currently being readied for a planned April move-in.
“The business is giving us the confidence to say ‘add more people,’ ” Rose said.
The company earns a fee from insurers each time a customer visits the Comparenow site and buys a policy. The startup does not charge insurers for having a presence on the site.
Adding multiple insurers in all its markets is key to company’s success.
It now has more than a dozen insurance carriers marketing policies on the site. They include The Hartford, The General and most recently Rose’s former company, Elephant Auto. It’s able to market policies to consumers in all but South Dakota, Alaska, Hawaii, Wyoming and Mississippi.
For its ad push, the company has chosen to roll out promotions in states where it has the most carriers and where the most rates will show up for a customer’s search on the site for comparison.
“We don’t want customers to come to the site and get no quotes or one quote,” Rose said. “We went after California first because we had the greatest coverage.”
It has kept much of the ad work local, Rose said, working with Richmond agencies including The Branching, Siddall Communications, 93 Octane, Park Group, The Flores Shop and Cream Studios.
As for how big and how quickly Comparenow might grow, Rose said it’s still early in the game.
Because it’s an intermediary and not an insurance company, Rose expects the company won’t grow as large as a carrier like Elephant. Admiral, the United Kingdom version of Comparenow, has just under 200 employees, though the U.K. is smaller than the U.S.
“It’s growing as fast as it makes sense,” he said. “Sometimes that means sprint your ever-loving heart out. Other times that means holding back because of certain conditions.”