A Fat Startup from Virginia: Andrew Rose, CEO of Compare.com (Part 4)

Sramana Mitra: In what capacity did you start that company? Were you just a regular entrepreneur or were you doing this in an intrapreneurship mode?

Andrew Rose: It’s a bit of both. The UK office provided the capital. I was employee one and I hired up to hundreds from that point. It is intrapreneurship, but it felt much more like entrepreneurship. You didn’t have a safety net underneath you with a corporate structure around you. You have to do everything.

The first time somebody wanted to get paid, I had to figure that out. There wasn’t something that you could link into. You have to create your own HR manually. You have to do all of those kind of things. So it’s that hybrid of intrapreneurship and entrepreneurship.

Sramana Mitra: This is not what the current venture is, I assume. You’re on a different venture.

Andrew Rose: That is correct. What we’re going to do is move quickly right now because that’s the tipping point. I created that company for them. I was loving it and enjoying it, but the entrepreneurial bug was still there. I thought of an opportunity for another kind of business, one that was flourishing in the UK and Europe.

Being part of this group exposed me to comparison websites that compared auto insurance companies in prices. I said “We got to have this in the US. This will be brilliant.” So after some research and lots of convincing, I got the go-ahead to start that. But this one was a bit different. They said “You can start, but you got to raise money.”

This was a new adventure for me, another aspect of the entrepreneurial side is going to get the money that’s going to make this possible. So in the latter part of 2011 and early part of 2012, I went out and did road shows and was fortunate enough that this idea resonated. I was able to raise just under $100 million dollars for what is now Compare.com.

Sramana Mitra: Now we have to drill into that. You can’t raise a $100 million dollars just like that. So let’s go through the real journey of that. When you started Compare.com, what did you start with? What was the point at which you raised the first funding? What did you have? How did that come together?

Andrew Rose: We had next to nothing, but we had a business that our parent company Admiral Group had made phenomenally successful in the UK. They started the business back in 2002 called Confused.com. I accepted that name for use here in the US and Americans don’t want to tell their friends “Yeah, go to Confused.com. You’re going to get a great deal.”

It doesn’t have the same resonance, so we chose Compare.com as our name, but we had the history of this being a transformative business model in the UK. From 2002 to 2007, that business grew and started taking meaningful portions of the market. As it stands now in the UK, Confused.com and a couple of competitors that it had, represents 75% to 80% of all auto insurance shopping in the UK. It’s a dominant model and you saw how powerful it was.

We had a bit of proof that Admiral Group was good at building these businesses. We started one subsequently in Spain and in France and had a success story there. We also had a platform that we could start with. It didn’t work in the US because it had to be massively modified for our regulatory environment.

Admiral Group had committed some capital and then we have that platform to start with. That allowed me to go out and leverage my network and the extensive network of some other colleagues to go make the pitch. We were fortunate enough to have several investors. Foreign investors came on board and the sum of those investors generated just short of a $100 million dollars to get us going.

This segment is part 4 in the series : A Fat Startup from Virginia: Andrew Rose, CEO of Compare.com
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