French startup Alan has raised a new funding round of 183 million euros ($193 million at today’s exchange rate). The company sells its own health insurance products and has expanded to include other medical products and services. In other words, Alan wants to create a superior healthcare app and one-stop shop for all your questions and needs when it comes to your health.
“We decided to raise again at the beginning of the year,” co-founder and CEO Jean-Charles Smolyan Werf told me. We have received some investment requests. We could see that the markets could turn around and we just didn’t know how long it would last. Now, we are self-sufficient and will remain so until we reach profitability.”
Teachers’ Venture Growth (TVG), the investment fund of the Ontario Teachers’ Pension Scheme, is leading the round. Existing investors such as Temasek, Index Ventures, Coatue, Ribbit Capital, Exor, Dragoneer and Lakestar are also participating in this new round.
Today’s round is a Series E round and comes just one year after the startup raised €185 million in Series D. While Alan raised the same amount of money twice, the company’s post-money valuation has skyrocketed. Last year, the startup was valued at 1.4 billion euros. It has now reached a valuation of 2.7 billion euros (that is, $1.5 billion and $2.9 billion respectively at today’s exchange rate).
We sell insurance products at cost – more or less. Then we add the membership fee on top. This model is working fine Jean Charles Smolyan Werf
Alan’s primary business and largest source of income has not changed. The company is a health insurance company built for the 21st century. After gaining regulatory approval, Alan built his own underwriting engine.
The company can now enroll clients of all sizes and from all industries. Big companies can adjust each parameter to build the right insurance package for them.
As for people covered by Allan’s health insurance, the experience is better than that of other insurance companies. Alan tries to automate as many processes as possible so that the user experience is as smooth as possible.
For example, if you’re paying at the doctor’s office and it’s a simple bill, Alan automatically processes the bill and transfers the money to your bank account via an instant transfer. The result is that you are often compensated before you go home. France’s national healthcare system will also reimburse you for part of it automatically, but this usually takes a few days.
“We continue to roll out our model, which is 100% based on the loss ratio formula. We sell insurance products at cost – more or less. Then we add the membership fee on top. That model works really well,” Samuelian-Werve said.
The company has succeeded in attracting 300,000 members so far across 15,000 companies. Alan now says he generates €200m in annual revenue.
Not just an insurance company
Alan’s founders were clear about their vision from the start. They don’t just want to build an insurance company. They want to build a startup healthcare company that goes beyond insurance products.
Users very quickly discovered that they could use the Alan app to find a health professional near them using Alan Map. The company also works with general practitioners so they can answer your questions from the chat interface.
Not all of those side bets worked. A year and a half ago, Alan launched Alan Baby, a second app focused on your baby’s health. It provided a mix of content, some community discussion, and the ability to start a discussion with a doctor. The company will be shutting down Alan Baby in the coming weeks.
“In 2022 and 2023, mental health will be a very high priority. That is why we have decided to close Alan Baby so we can reallocate resources,” Samuelian-Werve told me.
When it comes to mental health, Alan presents an app to the consumer after the acquisition of Jour. There is also a B2B service called Alan Mind.
The company provides exercises and content. Employees can also call an expert whenever they need to. Some companies subscribe to Alan Mind exclusively. Others are adding the Alan Mind bundle to the existing Alan contract.
With Alan Clear, Alan now also offers a way to experiment with glasses using augmented reality. If you find a pair you like, you can buy it directly through the app.
By the end of 2025, Alan wants to achieve profitability. It will require 3 million members, but the startup also plans to hire 1,000 people by then. The company currently operates in France, Belgium and Spain. There won’t be any new market in 2022, but Alan could launch a new country in 2023.
While Alan has ambitious goals, he currently holds a small market share. 96% of the French population has health insurance coverage. “We still have less than 1% of the market share,” said Samuelian Werf.
“We are at the beginning of our story. It is a first small step but everything is still ahead.”