French startup Alan has raised a new €183 million round of funding ($193 million at today’s exchange rate). The company sells its own health insurance products and has expanded into other medical products and services. In other words, Alan wants to build a super health app and a one stop shop for all your questions and needs when it comes to your health.
“We decided to scale up again at the beginning of the year,” co-founder and CEO Jean-Charles Samuelian-Werve told me. “We have received some investment requests. We could see that the markets could turn around and we didn’t know how long it would last. We are now 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 comes just a year after the startup raised its Series D of €185 million. Although Alan raised essentially the same amount of money twice, the company’s post-money valuation jumped dramatically. Last year, the startup was valued at €1.4 billion. It has now reached a valuation of €2.7 billion (ie, respectively, $1.5 billion and $2.9 billion at today’s exchange rate).
We sell insurance products at cost price – more or less. And then we add our membership fee on top. This model works very well Jean-Charles Samuelian-Werve
Alan’s core business and biggest source of income have not changed. The company is a health insurance company built for the 21st century. After getting approval from regulators, Alan built his own underwriting engine.
The company can now register customers of all sizes and from all sectors. Large companies can tweak every parameter to build the insurance package that’s right for them.
As for people covered by Alan’s health insurance, the experience is better than with other insurers. Alan tries to automate as many processes as possible so that the user experience is as seamless as possible.
For example, if you are 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 instant transfer. The result is that you are often refunded before returning home. France’s national healthcare system will also reimburse your share automatically, but this usually takes a few days.
“We continue to launch our model, which is 100% based on the loss ratio formula. We sell insurance products at cost price – more or less. And then we add our membership fee on top. This model works very well,” said Samuelian-Werve.
And the company has managed to attract 300,000 members so far in 15,000 companies. Alan now says it generates annual revenue of €200 million.
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 healthcare startup that expands beyond insurance products.
Very quickly, users discovered that they can use the Alan app to find a healthcare provider near them using Alan Map. The company is also working with GPs so they can answer your questions from a chat interface.
Not all of these 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 discussions, and the ability to start a discussion with a doctor. The company will close Alan Baby in the coming weeks.
“In 2022 and 2023, mental health will be a very high priority. That’s why we decided to close Alan Baby so we could reallocate resources,” Samuelian-Werve told me.
When it comes to mental wellness, Alan offers a consumer app after acquiring Jour. There is also a B2B service called Alan Mind.
The company provides exercises and content. Employees can also contact a specialist whenever they need to. Some companies subscribe exclusively to Alan Mind. Others add the Alan Mind package to the existing Alan contract.
With Alan Clear, Alan now also offers a way to experience glasses using augmented reality. If you find a pair you like, you can buy it directly from the app.
By the end of 2025, Alan wants to achieve profitability. It will take 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 markets in 2022, but Alan could launch a new country in 2023.
Although Alan has ambitious goals, he currently has a small market share. “96% of the French population has health insurance coverage. We still have less than 1% market share,” said Samuelian-Werve.
“We are at the beginning of our history. It’s a baby first step, but everything is still ahead of us,” she added.