Startups #nofilter had the pleasure of sitting down for espressos in Sofia, Bulgaria for an interview with Alex Sumin, Founder and Chief Marketing Officer of ClaimCompass. In short, ClaimCompass will help you get compensation for any EU flight delay that you’ve experienced in the last 3 years, with zero headaches, and no bureaucracy. Read on to see how this seamless business is taking off:
1. Where did the idea for Claim Compass come from?
All three founders are frequent travellers and had all experienced the inconvenience of flight disruptions. Like most people, we didn’t really know or think that there was much to do in those types of situations – you sort of just shrug it off. That was until our CEO, Tanya, stumbled upon an EU Regulation, dealing with just that. Even though at the time there were a few companies doing something similar, we still went through the cycle of building an MVP and validating the business model before going full-out.
2. The idea seems simple and risk free. A user simply enters their info, then Claim Compass does the background check and sees if the user is owed any money from airlines for prior flight delays. If they are, Claim Compass makes a formal claim with the airline, handles the transaction, and then sends over a check to the user, (minus a 25% cut). Is it really that simple? Are there really no looming headaches that a user may have to deal with?
It really is that simple. We built the product knowing that passengers turn to us after an unpleasant experience with the airline, so we made sure that the process is as easy and smooth to complete as possible. What happens behind the scenes is a different story – many claims require a lot of work, research and often end up with our legal team, who work with National Enforcement Bodies and even represent our clients in court. But the complexity of the process is on us, not on the client.
3. We understand that there are a few competitors in the marketplace for this niche. What makes Claim Compass different or better than them?
Yes, there are a few other companies that provide a similar service. However, one has to differentiate between a website and/or a landing page, which can collect your flight information, and a business handling tens of thousands of claims monthly. We use machine learning algorithms to automate as much of the process as we can, and we have an API, which monitors an enormous amount of information, to identify disrupted flights and proactively notify passengers via our partnership network.
4. Now that Claim Compass and others are extracting money from airlines that many airlines and their CFO’s never had to worry about before – don’t you worry that airlines will appeal to their local governments (and primarily the EU) to change these laws? Surely the government wants to protect the airlines as well?
The EU regulation on which our business model rests, has been around for over 10 years. Sure, one cannot deny that airlines have significant lobbying power, but recent court settlements provide very solid grounds for its further implementation. Moreover, what most people don’t understand, is that their compensation is a contingent liability for the airline, which is already included in the price of the ticket. So by not paying out compensation, airlines are essentially pocketing passengers’ money.
5. Let’s say that governments begin to clamp down on the flight delay refund industry – does Claim Compass have a pivot move?
Even though we don’t consider this to be a serious threat for the time being, we have given it a bit of thought. We try to be as lean as possible and learn from previous experiences and from what our clients tell us. So far we’ve been seeing a considerable demand for our services, but should we reach a point where we are no longer able to preserve the business model in its current shape or form, I think the amount of data and the tech solutions we’ve developed, could be tailored to other industries, such as travel insurance, claim management, or even a software solution for airlines’ customer service.
We just wrapped-up Q1 of 2017 with over $1.3M claimed via our platform. That may sound like a big number, but that’s just a fraction of the total $8B, which is owed annually to passengers. We hope to multiply this number a few times by the end of the year.
7. How is your funding going – any big rounds on the horizon?
We anticipate opening a round later this year, when we hit our next milestone and can raise with a higher valuation.
8. For fun: What website do you go to check when your internet isn’t working?
9. For fun: Any advice for Startup #nofilter?
Have you thought of investor interviews? I feel like founders can learn a lot from it and understand what are VC’s and angels looking for when evaluating an investment opportunity.