French startup Alan has raised a new €183 million funding round ($193 million at today’s exchange rate). The company sells its own health insurance products and has expanded to other medical products and services. In other words, Alan wants to build a healthcare super app and a one-stop shop for all your questions and needs when it comes to your health.
“We decided to raise again at the start of the year,” co-founder and CEO Jean-Charles Samuelian-Werve told me. “We’ve been receiving some investment requests. We could see that markets could turn around and we didn’t know how long it was going to last. Now, we are self-sustaining and will be until we reach profitability.”
Teachers’ Venture Growth (TVG), the venture fund of the Ontario Teachers’ Pension Plan Board, is leading the round. Existing investors are also participating in this new round, such as Temasek, Index Ventures, Coatue, Ribbit Capital, Exor, Dragoneer and Lakestar.
Today’s round is a Series E round and it comes just a year after the startup raised its €185 million Series D. While Alan has essentially raised the same amount of money twice, the company’s post-money valuation has jumped quite drastically. Last year, the startup was valued at €1.4 billion. It has now reached a €2.7 billion valuation (that’s respectively $1.5 billion and $2.9 billion at today’s exchange rate).
“We sell insurance products at cost — more or less. And then we add our membership fee on top. This model works really well.” Jean-Charles Samuelian-Werve
Alan’s core business and biggest revenue source hasn’t changed. The company is a health insurance company built for the 21st century. After getting approval from regulators, Alan has built its own underwriting engine.
The company can now sign up clients of all sizes and from all industries. Big companies can tweak every single parameter to build the right insurance package for them.
As for people who are covered by Alan’s health insurance, the experience is better than with other insurance companies. Alan tries to automate as many processes as possible so that the user experience is as seamless as possible.
For instance, if you’re paying at the doctor’s office and it’s a simple bill, Alan automatically processes the bill and transfers money to your bank account via an instant transfer. The result is that you are often reimbursed before you are back home. France’s national healthcare system will also reimburse its part automatically, but that usually takes a few days.
“We keep rolling out our model, which is 100% based on the loss-ratio formula. We sell insurance products at cost — more or less. And then we add our membership fee on top. This model works really well,” Samuelian-Werve said.
And the company has managed to attract 300,000 members so far across 15,000 companies. Alan now says it generates an annualized revenue of €200 million.
Not just an insurance company
Alan’s founders have been clear about their vision from the very beginning. They don’t just want to build an insurance company. They want to build a healthcare startup that expands beyond insurance products.
Very quickly, users discovered that they can use the Alan app to find a health professional near them using Alan Map. The company is also working with general practitioners so that they can answer your questions from a chat interface.
Not all of those side bets have 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 discussions and the ability to start a discussion with a doctor. The company is going to shut down Alan Baby in the coming weeks.
“In 2022 and 2023, mental health is going to be a very high priority. That’s why we decided to shut down Alan Baby so that we could reallocate resources,” Samuelian-Werve told me.
When it comes to mental well-being, Alan offers a consumer app following the acquisition of Jour. There’s also a B2B service called Alan Mind.
The company provides exercises and content. Employees can also contact an expert whenever they need to. Some companies subscribe to Alan Mind exclusively. Others add the Alan Mind package to their existing Alan contract.
With Alan Clear, Alan now also offers a way to try on glasses using augmented reality. If you find a pair that you like, you can buy it directly through the app.
By the end of 2025, Alan wants to reach 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, it currently has a tiny market share. “96% of the French population has health insurance coverage. We still have less than 1% in market share,” Samuelian-Werve said.
“We are at the very beginning of our story. It is a first baby step but everything is still ahead of us,” he added.