CarmaCare
A car insurance tech company offering an easier way to buy extended warranties that limits the cost of repairs due to mechanical failures and includes roadside assistance and support for unexpected breakdowns.
Website: https://www.mycarmacare.com/
News: https://techcrunch.com/2023/04/04/carmacare-car-repair-fintech/
Salt Labs
A rewards platform for hourly workers to earn rewards for every hour worked and can be redeemed for goods and experiences.
Website:https://www.saltlabs.com/ News:https://techcrunch.com/2023/03/29/salt-labs-raises-10m-to-gamify-contract-work/
Problem
CarmaCare
Wear-and-tear failures in cars are 15 times more likely, but insurance is not designed to handle those
Salt Labs
Companies struggling to hire workers so, they’re having to raise wages, and turnover tends to be high among frontline workers.
WINNER: Salt Labs
Why? Spendability by companies is higher, so B2B problems tend to be more lucrative
Insight
CarmaCare
People are often afraid to take their car to the shop due to a feeling of being taken advantage of
Salt Labs
Gig workers are more likely not to seek medical treatments because of cost, go hungry or skip utility bills
WINNER: Salt Labs
Why? Insight is a primary driver of human behavior thus more enduring
Market Opportunity
CarmaCare
$35 billion industry, nearly half of Americans fall into debt over car repairs
Salt Labs
14% of gig workers in the U.S. earned less than the federal minimum wage and that 26% earned less than $10 per hour.
WINNER: Salt Labs
Why? There are many gig workers in the US, and growing, while car ownership is falling
Product
CarmaCare
Easier way to buy extended warranties that limits the cost of repairs due to mechanical failures and include roadside assistance and support for unexpected breakdowns.
Salt Labs
Rewards platform for hourly workers to earn rewards for every hour worked and can redeemed for goods and experiences.
WINNER: Salt Labs
Why? The drive to earn is higher than the drive to spend, so inbound interest will be higher for Salt
Competition
CarmaCare
Point-of-sale at the car dealership, traditional insurance
Salt Labs
Companies that manage long-term asset ownership, including 401k and investment accounts
WINNER: Salt Labs
Why? Financial companies have higher acquisition power
Team
CarmaCare
Second-time founders: AutoFi
Corporate background: LendingClub, Kiavi, LearnVest, Kin Insurance.
Salt Labs
Second-time founders: DailyPay, for users to instantly receive their earned, but unpaid, income. 500,000 users such as Hilton, Kroger and Dollar Tree.
WINNER: Salt Labs
Why? DailyPay is still active and in the same sector with key challenges removed.
Funding
CarmaCare
$4.5 million
By Inspired Capital, Twelve Below, Revelry, 81 Collection
Salt Labs
$10 million
By Fin Capital, Anthem Venture Partners
WINNER: Salt Labs
Why? More funding
Plans
CarmaCare
Team: Product and technology, customer acquisition, underwriters and data scientists
Features: Small debt facility to begin financing customers and other new products
Salt Labs
Team: Product development, go-to-market strategy, execution
Features: “Vesting” to allow workers to earn additional rewards by working at a given job for some period of time.
WINNER: Salt Labs
Why? Both company’s team and feature goals are equally specific
Winner is Salt Labs!
Additionally, in the context of CarmaCare, I think 3 key assumptions might fail.
1. Car ownership is growing
Counter: With the rise of Uber, I believe car ownership is actually falling
2. People will be willing to pay for covered repairs
Counter: The recession will make it less likely that consumers will spend more on their cars / buy new cars
3. Large car manufacturers won’t enter the insurance and claims space
Counter: More and more, car repair is being done inhouse, especially as cars become more specialized (Tesla is already disrupting this model and their cars are getting cheaper)
