Startup of the Week – Refund.me: making you cash from your flight delays2013-02-21 21
Ex-TV host Eve Büchner’s fear of flying may make it seem illogical that she’d launch a startup centred on air travel. But maybe it’s exactly this fear that makes her so dedicated to ensuring every other element of the flight goes as smoothly as possible for passengers.
Launched in August last year, refund.me is the Potsdam-based startup dedicated to getting passengers compensation from flight companies when their planes are delayed or cancelled. It’s a idea that is well received by disgruntled flyers – the startup is already receiving 300 calls per day from around the world, with the app being downloaded in places as far-flung as Guadalupe and Australia.
We caught up with Büchner to find out why a career as a news anchor just wasn’t enough for her and how her number one goal is to help passengers claim their rights…
Who are you and what are you doing?
Hi, I’m Eve, the founder of refund.me. It’s a free app that helps air passengers get compensation for delayed, canceled or overbooked flights – it works really quickly. Users just have to key in their flight number and departure date and the high-tech system checks whether they’re entitled to compensation according to EU Regulation 261/2004.
It then generates an EU compliant claim form with all the required details. If the claim is enforced successfully, the airline will pay compensation of up to €600. On average a claim takes two-to-four months from start to finish, and our success rate is approaching 90 per cent.
How did you come across your idea?
My friend pointed out this law in European legislation, 261/2004, and I realised there wasn’t a great service taking the pain out of claiming these refunds – if you do it yourself it’s very cumbersome and time-consuming.
We recognised passengers worldwide are entitled to rights spelled out by this EU regulation. But we acknowledged that being entitled to compensation doesn’t mean people get it. We decided it’d be great to build a consumer-orientated service that takes away the hassle of filing a claim, speaking with lawyers – all that is no fun.
So we developed technology which lets you can claim with your fingertips in under 20 seconds, all from your smartphone or desktop. What makes us happy is a business model that goes hand in hand with a social concept, because we’re helping people claim what they’re entitled to.
Who are the founders and how did you find each other?
I have a background in TV journalism – I was a TV anchor and a correspondent for German news channel N24. But it was time for me to move on to the next chapter of my life, I was always reporting on events, but I had the desire to get actively involved in the Zeitgeist myself.
My cofounder is a friend of mine, his name is Christian Hormann and he works as a lawyer. He has 35 per cent of refund.me. Quantum Reality, a pre-seed investment and holding company which I cofounded in 2011, has 65 per cent.
We invested a great deal of money into our technology, which makes us stand out from our competitors. One is euclaim, they were the first, there’s also Fairplane and Flightright, which is from a city near Berlin. Our difference is that we’re addressing a worldwide market, not just Germany.
We also have much shorter processing times and a highly automated work flow. Claims are thoroughly checked, to make sure they fit the very complex criteria of the EU regulation. If a claim gets accepted, we rank it in a proprietary algorithm that evaluates the likelihood of success, to make the claims that go through to the airline watertight. That’s why we have such a high success rate.
We also have a lawyer network throughout Europe – which we try not to use, as when we send the claims to the airlines they are watertight. But it is good as backup.
What is your business model?
We have good funding. We don’t want to sell in the next three to four years. But we are committed to the end user business, B2C – we receive 25 per cent of the compensation from successful claims as commission. That way, everyone wins. If they are unsuccessful, we don’t charge anything. We also have a B2B model, we can include our widget directly on the website of flight companies so customers can check flight information in real time and see if the flight qualifies for a refund under EU Regulation 261/2004.
Who is financing you?
We are being financed by Quantum Reality – the investment company that I also cofounded. It is a partner in refund.me. Aside from myself, Quantum Reality is made up of four US-based angel investors.
Is there something that you’re missing?
Not really. We can process many claims without necessarily hiring more people, as the process is fully automated. We don’t need to rent offices either, as the software is all cloud-based, so we can work from anywhere, anytime. It’s an advantage when staff are in different locations, because they’re in different time zones.
What advice would you give founders?
The field of startups is very crowded. My first advice to founders is to come up with a solution for a real problem and not to create a solution and then look for the problem. A real solution lends itself to a natural 30-second elevator pitch and everyone will understand why your startup makes sense and is needed. And, of course, you need to be able to accept failure.
I’d like to go for lunch with Niklas Zennstroem, the founder of Skype and Kazaa. I would ask him what it takes to become so disruptive that you can’t be shut down, but are actually bought.
Where will you be in a year’s time?
I really want people around the world to be using our app. If they have a big delay, they go straight to claim their rights with our app. It’s their first thought!
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