French startup Alan closed a $28.3 million Series A round a few months ago. Index Ventures is leading the round, Xavier Niel is participating as well as existing investors CNP Assurances, Partech and Portag3 Ventures LP.
Alan wants to make health insurance as simple as subscribing to a software-as-a-service product. It starts with clear pricing and transparent reimbursement policies. For instance, you can cover a 30-year-old employee for €55 per month.
The price will be exactly the same for all types of companies. The only thing that changes is that you’ll pay a bit less for younger employees and more for older employees. Each employee can choose to cover their significant other for the same price, and their kids for an extra €40 per month.
And then, Alan is following the startup playbook. The overall user experience is much nicer than the interface of a traditional health insurance.
You get a modern dashboard where you can control and view all your health expenses, a mobile app and good customer support. You can also add life insurance from CNP Assurances from the same interface.
This simple promise seems to be working quite well as Alan now covers 7,000 employees across 850 companies. As you can see, the startup has been focusing on small companies as it’s easier to make them switch.
Alan co-founder and CEO Jean-Charles Samuelian also told me that small companies are underserved by big insurance companies. There’s no reason you should pay more because you work for a small company.
With today’s funding round, Alan wants to offer the same product at scale. The company plans to grow from 22 employees right now to 80 employees by December 2018.
“The goal is to reach €100 million in annual recurring revenue as quickly as possible,” Samuelian told me. The startup currently generates between €5 and €6 million in annual recurring revenue.
Eventually, Alan wants to expand beyond France and address other European markets. While the U.S. seems like a big market, it’s already quite crowded. Samuelian thinks there will be a bigger opportunity by building a European company. It’ll take quite a bit of time as regulation is different in each European country.
Recently, Alan has been focused on building a solid infrastructure, optimizing processes and automating tasks. In many ways, Samuelian still thinks about Alan as a tech company. “We want to build the Apple or Google of Europe,” he said.
Alan can beat competitors on price and flexibility by building a tech product that actually works — that’s how you can serve 7,000 people with a lean team.
Disclosure: I share a personal connection with an executive at CNP Assurances.