MileIQ raises $11M to take the pain out of mileage tracking and put more cash in users' pockets
How much would you pay for an app that put more than $500 extra into your pocket each month without any effort or behavioral change on your part?
That’s the question that MileIQ users are asking themselves after just a few days of using the mileage tracking and reporting app. The company is not revealing exact revenue or customer numbers, but given the unappealing alternatives, its not surprising the SaaS finance and productivity is earning an NPS score of 72 and 4.5- to 5-star App Store ratings.
Today, MileIQ announced $11 million in Series A funding via a round led by Trinity Ventures with participation form existing investors CRV, Marc Benioff, SV Angel, and other angels. Trinity general partners Karan Mehandru will join the company’s board.
With the IRS valuing each business mile driven to be worth $0.575 in reimbursements or tax deductions, mileage is often the most valuable expense line item an individual can report. US workers claim a total of $85 billion in business mile reimbursements per year. But, due to the pain of using the available alternatives – a paper and pen tracking systems or a bevy of inaccurate or highly cumbersome digital solutions – many millions of eligible miles go unclaimed every year.
MileIQ is changing that. The company offers a set-it-and-forget it solution that works in the background on a user’s smartphone, tracking and recording all driving activity. The app then uses artificial intelligence and machine learning to filter personal and business mileage, based on time, day, and other factors. Users then view these drive details as a series of cards, swiping cards to the left or right to classify as business or personal. Over time, the app will learn an individual user’s routes and behavior, growing more accurate in the process.
“We err on the side of over-reporting,” says MileIQ CEO Chuck Dietrich, a former Salesforce GM and CEO of Sliderocket. The last thing the company would want to do is deliver a negative customer experience by costing users money they’ve rightfully earned. Plus, it’s easier to notice and exclude ineligible trips in a weekly report than it is to remember overlooked trips and add them to the system. With the average business trip worth $8.03 in deductions, the average MileIQ user reports $535 in deductible miles per month. The company has already scored integrations into popular expense tracking and tax platforms like Concur and Freshbooks making for an even more seamless experience.
“The majority of users had no idea how much of that value they were leaving on the table before they started using MileIQ,” Dietrich says. “Whether those dollars are reimbursed by an employer or deducted on a tax return, they add up to a meaningful sum that can make a real difference to a person’s finances.”
MileIQ is focusing its growth efforts on Schedule C workers, meaning those who are self-employed or sole proprietors. There are 53 million of these independent workers in the US today, a total that is growing rapidly with the growth of the on-demand economy. The app is growing rapidly among Uber and Lyft drivers, Instacart and Postmates delivery people, and AirBnB hosts, not to mention traditional salespeople, real estate agents, small business owners.
"In our line of work we're meeting with clients and making deliveries throughout the day,” says San Francisco Brewing Co. owner Josh Leavy. “We're focused on customer satisfaction and barely have time for paperwork let alone tracking miles. MileIQ makes our mileage deductions easy by tracking our miles and letting us organize them at a later time. We're logging thousands of dollars in deductible drives every month and it's great knowing we finally have an accurate record."
MileIQ has always been available for iOS and today launched its Android app, making it a truly ubiquitous solution. The app is available under a freemium mile under which users can track up to 40 individual trips per month for free, or pay $5.99 per month, or $50 per year, to track unlimited trips. With the average single trip netting $8 in reimbursements, this is about the biggest no brainer in SaaS. Dietrich says that the company has multiple-hundreds of thousands of active users, and multiple-tens of thousands of paying users, but declined to share more specific figures.
It’s easy to look at MileIQ and think that it should be a feature within a broader expense tracking or tax reporting software platform. But Dietrich disagrees, pointing to a need to focus and nail the user experience in this use case.
"Doing the mileage reimbursement piece magically requires a lot more work than people think," he says. "Lots of expense reporting platforms have tried – they have a drive detection feature buried somewhere deep in their app. But people don’t adopt it because there's too much friction and they typically don’t do a good enough job of data analysis. We believe we can optimize around creating a brand with end-users so they love what we’re doing -- it’s a foundation for building a giant company. We want to do that before we expand into other similar products based around automating administrative life, [while leveraging the 'IQ' brand]."
For Mehandru, this line of thinking fits within a broader Trinity Ventures thesis that mobile commerce applications are better off doing a great job meeting a single need than they are doing an okay job meeting many needs.
“That’s something we thought a lot about during due diligence, but once we peeled the onion, it was clear this could be a lot bigger than people realize,” he says. “With tens of millions of Schedule C workers, this company can get to $100 million [annual recurring revenue] at just 4 percent market penetration. Of course there are more line-item deductions on the tax form that we can target down the line, but we have no plans to expand our focus in the next 12 months and, frankly, we don’t need to.”
This being the case, while MileIQ will always keep refining its product, its primary focus today is on building awareness – including seeking business formal relationships with many of the sharing-economy giants – while also expanding into international markets, where mileage reporting requirements can be far more stringent than those in the US.
“Timing is really important in our business – being early is just about as bad as being wrong,” Mehandru says. “We think that the rise of the sharing economy is a secular trend that’s here to stay. This could really change the playing field for businesses like Uber and for tax-prep accountants if they were to give it away to their drivers and customers. Watching the positive consumer reaction to MileIQ’s and the company earning an NPS score of 72 has really been impressive. We feel like this is a rare, perfect combination of team, traction, market, and timing.”