When the tech entrepreneur Chad Nitschke decided to base the workforce for his San Francisco startup Bunker in Madison, it was seen as a bit of a weird move among some of his peers in Silicon Valley.
“When we were getting going, it was more that I had to pitch investors on the benefits of a city like Madison,” said Nitschke, a former Madisonian.
Times have changed, he said. Bunker, a platform that makes it easier for small-business contractors to get commercial insurance, is now one of Madison’s fastest growing startups. And in the Valley, the decision to open offices in Wisconsin no longer raises eyebrows. It’s become clear that Madison has a pool of talent, and is a cheaper location to operate a business, said Nitschke.
“The line I use is, San Francisco is a great place to raise capital; Madison is a great place to deploy capital,” he said. “Literally every investor that I’ve talked to loves that model.”
The company currently has 22 employees, 20 who are based at the company’s new offices above the Comedy Club on State. The new space epitomizes a trendy workplace, boasting floor to ceiling windows, fishbowl-style meeting rooms, a huge breakfast bar with Edison bulbs overhead, and rows and rows of computers at shared desks. Many of the seats are unfilled: Bunker is counting on recruiting in the coming months.
The company’s product is web-based software that streamlines the process of obtaining the insurance typically required of freelancers and contractors when they sign up to work with a big employer.
Nitschke said he got firsthand experience with that kind of commercial insurance when he worked with the insurer CUNA Mutual and the massive holding company Axis Capital. He said it wasn’t long before he realized that the current system for small businesses getting insurance is arduous and inefficient.
“(Small businesses) would have to go find an agent, find a broker,” he said. “It was more of a brick-and-mortar process.”
He said it would often be weeks before a business could get a quote for a policy.
In 2015, he decided to take a risk and solve those inefficiencies on his own by starting a business.
“The insurance industry is at the point of going through this dramatic change,” he said, explaining his decision to become an entrepreneur. “If I didn’t take this chance, I was going to go back and regret it.”
The digital platform he and co-founder Dan Feidt came up with returns quotes to users in about three days, the company claims. It’s a product they say is appealing not just to small businesses looking get insurance, but also for companies looking hire those businesses.
Besides the platform itself, the company has also designed an insurance policy of its own for contractors disinclined to sign up for year-long insurance policies that are typical on the market.
“I’m able to now buy a policy that operates more like a subscription,” said Nitschke. “If I wanted to buy a three-month policy... I could do that.”
While Nitschke wouldn’t share specifics, he said the number of users on the platform has been growing rapidly. He said the company has also partnered with a select number of insurers who are “forward-thinking.”
“We’d rather have a smaller number of carriers with more meaningful relationships,” he said.
Investors seem to like the idea. The company has raised $8 million through two rounds of fundraising over the past two years. It’s preparing for another round of fundraising this year. The company has also accumulated its fair share of buzz: last fall, Forbes ran a story on the company headlined “How A San Francisco Startup Is Bringing, Yes, Excitement To Small-Business Insurance.”
Meanwhile, Nitschke said the company is looking at breaking into other areas in need of a better system for handling insurance: For example, company franchising and property rental.