After a bit of a bumpy start, Y Combinator-backed insurance comparison site Leaky is getting off the ground.
On Wednesday, the San Francisco-based startup said it had raised $670,000 in seed funding and opened up its site to users nationwide. The funding came from 500 Startups, Box Group, Start Fund, Y Combinator, and several angel investors.
The company initially launched in August 2011 with a site that compared car insurance quotes from top agencies and quickly gained traction among users. But it was forced to go offline and back to the drawing board after insurance companies sent it cease and desist letters because the startup was scraping data from the insurance companies’ web sites.
Leaky (as in “we keep your wallet from leaking”) relaunched in March of this year, but only in California, after finding a way to reverse engineer insurance estimates based on publicly-available data and insurance documentation.
“Innovation in insurance has always been sparse,” said co-founder and CEO Jason Traff. “There are very few people who are doing impartial comparisons that are beneficial to the user.”
Several services help car owners get online quotes, including Progressive, which lets people see a comparison of price estimates, and Insurance.com and CarInsurance.com, which include samplings of actual prices. Bu Traff said the latter two sites are limited by their ability to only show prices for insurers who have partnered with them, which won’t include prices from most of the largest insurers.
On Leaky, users take about 2 to 3 minutes to complete a questionnaire asking about their location, demographics and car-related questions, and then the site returns estimates from an average of 10 to 11 insurance companies, the company said. Additionally, the service monitors users’ insurance profiles and alerts them when they may be able to save more by switching plans.
For now, the company is focused on auto insurance but Traff said Leaky, which is actually a licensed insurance agency, plans to expand into other kinds of insurance. The service will always remain free for users, he said, but as Leaky expands it intends to make money from sponsorships.
At the moment, not too many startups are taking on the insurance industry. But Leaky isn’t completely alone in its mission. CoverHound, a 2011 graduate of the AngelPad incubator raised $750,000 to similarly help car owners compare insurance quotes.