Entering the TechStars accelerator Luke Cooper and Chris Garvis didn’t know how helpful they could be to one another. In fact, they didn’t even know each other.
Cooper had a background that gave him the idea for a company, having worked as in-house counsel at State Farm Insurance. He saw customers who were dissatisfied with the claims process, and had an idea that he could offer something better to people. “With my JD/MBA background, I didn’t understand how to put pieces together,” he said.
That’s where Garvis came in. The two were introduced by a mentor.
“He really came with some cool ideas on how we could meld together the problems we’re trying to solve,” Cooper said. Garvis soon became cofounder and CTO of their new company: Peach.
What we really want to do is show you the difference between buying a warranty and not buying a warranty.
Six months later, the startup has closed a $500,000 seed round, and is up to five employees at its Fleet Street office located in between Harbor East and Little Italy. Last week, the company launched the “Sweet Warranties” platform, and the app of the same name debuted in the App Store.
Sweet Warranties is a marketplace for warranties that allows users to view a variety of plans for products like laptops, TVs and, of course, often-dropped mobile phones. Many warranties are sold at purchase, and go straight through the companies that sell the products.
But Peach looks to show other options that provide just as much coverage — and are cheaper. The company makes money from referral fees. Ultimately, however, Cooper said the hope is that the info provided and price point convinces the customer to spend a little extra cash on a warranty.
“What we really want to do is show you the difference between buying a warranty and not buying a warranty,” Cooper said.
The model dives straight between the lines of the U.S. warranty market. Nationwide, consumers spent $40 billion last year on warranties for electronics. There’s a lot of entrenched interests, but Cooper knows he isn’t alone in believing the industry makes the claims process unnecessarily confusing, suffers from a lack of communication with consumers. In the future, the team is looking to add features that automatically start the claims process, and make repair options more readily available.
“Insurance is just an ugly industry run by old white men that love the sound of money,” Cooper said. “That’s cool, but for us we want to make sure we’re constantly thinking about consumers.”