January 05, 2017
By Mark Guarino
After Badal Shah became a homeowner in Barrington Hills, he decided to appeal his property tax bill. He did it the old-fashioned way: by hiring an attorney. Soon he discovered that the data being used to request a lower assessment had little to do with the reality of his house and surrounding area. “It was a terrible process with no transparency,” he says.
Figuring there were plenty of homeowners as stymied as he was, Shah co-founded an online resource that uses Big Data algorithms to help people appeal their property taxes. TurboAppeal launched in March 2015 with a seed investment of $1.5 million and in October raised $4 million led by Guaranteed Rate. Shah expects revenue to increase more than 500 percent in 2017 thanks to recent partnerships that expand the technology to the commercial market after serving just residential.
With no competitor its size, Shah says he wants TurboAppeal to be the software of choice in every law firm, real estate office and living room across America. Its success rate should help him expand: He says the tool results in a tax break 85 percent of the time because it uses data that take into account every local attribute that's factored in to tax assessments.
The company, which has 31 employees at its Loop headquarters plus a few at a satellite office in Denver, earns 30 percent of each reduction; Shah says savings average $1,200 per year based on current assessments in Illinois and Florida. In January, the rollout will stretch across at least 10 states.
CEO Shah, 34, says his entrepreneurial spirit comes from his father, Satish Shah, a native of India who arrived in the Chicago area in 1970 with nothing but eventually built Aakash Chemicals, a specialty chemical manufacturer in Glendale Heights that sells to more than 50 countries. The younger Shah worked for the family-run business during summers and weekends and eventually had a 10-year stint running it with his brother until he left, hoping to capitalize on his interest in local tech.
His partner in TurboAppeal is John Guidos, an attorney friend who specialized in property tax appeals. They hatched the idea over beers in 2013, after Shah graduated from Northwestern University's Kellogg School of Management and had his disappointing stab at appealing his Barrington Hills tax bill.
Thaddeus Wong, a co-founder of residential real estate brokerage @Properties, says he was the first investor to back Shah because it became obvious “he understood the problem he was trying to solve.”
Shah and his family—his wife, their 6-year-old daughter and 4-year-old son—now live near Maggie Daley Park, where Shah can walk to work. In their free time they see live theater or catch Bulls games. He says he adopted his father's rigid work ethic because it is the straightest line to success. “He always taught me to think ahead,” he says. “Whatever decision you make in the present—how does that affect your business in the future?”