Paris-based Alan has raised €185 million in its latest funding round, bringing its valuation to €1.4 billion. New investors Coatue, Dragoneer and Exor led the round, which also included existing investors Index Ventures, Ribbit Capital and Temasek.
The startup has been growing at a steady but not-so-slow pace. In 2016 it had just obtained approval from regulators to become an official health insurance company, it now covers more than 160,000 people and generates revenue of more than €100 million per year. Although most of this income is spent on claims reimbursement, this is an impressive revenue trajectory considering how the company built its health insurance products from the ground up.
This latest round of funding will allow Alan to continue to insure more people. Like other insurance companies, Alan has capital requirements to comply with health insurance regulations. The health insurance visionary still has enough cash in its bank account for the next 12 to 18 months, but it is common for successful startups to raise funds when they are in a strong position to ensure operational flow. Indeed, Alan has managed to deliver on its goals and vision of international expansion.
Jean-Charles Samuelian-Werve, co-founder and CEO, explained how the strategy was to select a partner “that has a really long-term vision”, despite already good valuations. “We thought it was the right time and we had several term sheets,” he added.
Alan’s offer strongly responds to demand in France, where employees are covered by both the national health system and private insurance companies. Alan sells its products to other companies so that their employees are automatically covered by Alan contracts. This is a kind of B2B2C game. Following this latest round of funding, the startup will now have the opportunity to further iterate its holistic healthcare and health insurance solution.
Currently boasting 9,400 customers counting among them WeWork, Deliveroo, JustEat, Vitaliance and Big Mamma in France, Belgium and Spain, Alan aims to reach 1 million members by the end of 2023.
To achieve this, it is counting on international expansion (currently Alan’s customers are mainly based in its native market), product innovation and customer satisfaction through additional services.
In terms of product innovation, Alan has designed and already offers a modular insurance builder. Small companies can subscribe to Alan with a few clicks. Large companies can change every parameter to create the insurance package that suits them.
In terms of additional services, the company envisions a comprehensive platform that allows users to automatically manage sick leave, change employee enrolment status, etc., while employees can access a seamless offering by locating doctors near them and their average fees. The entire solution is based on convenience and transparency.
The speed with which Alan tries to reimburse claims is another game-changer in its health insurance offering. For simple claims, the startup analyses and categorises them as swiftly as possible, then makes an instant SEPA transfer. As a result, 75% of claims are reimbursed and available in the policyholder’s bank account within an hour.
These key product features all contribute to customer satisfaction. But Alan goes beyond insurance products by offering several additional services that are expected to increase loyalty. For example, you can chat with a doctor, get medical advice for your baby’s health, subscribe to a free meditation app, book a telehealth appointment with a clinicians talk to someone about your mental health, etc.
In fact, once you are insured by Alan, you become a member and can access all these services at no extra cost.
Eventually, Alan plans to launch a self-care advice service to help you contact the right health professional for your health problem. In Spain, for example, Alan can already make appointments for you.
Finally, Alan plans to reach new customers through aggressive expansion targets. The company plans to hire 400 people over the next three years and expand into other sectors with tailored insurance products, such as retail, wholesale and industry.
Although the company is still focusing on France, Belgium and Spain for the foreseeable future, following its latest funding round it has already expressed its intention to expand further in Europe.