French startup Alan has raised a new round of funding of €183 million ($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 create a super health care app and a one stop shop for all your questions and needs when it comes to your health.
“We decided to fundraise again at the beginning of the year,” co-founder and CEO Jean-Charles Samuelian-Werve told me. “We have been receiving some investment requests. We could see that the markets could change and we did not 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, leads 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 one year after the startup raised its €185 million Series D. While Alan basically raised the same amount of money twice, the company’s post-money valuation rose dramatically. Last year, the startup was valued at €1.4 billion. It has now reached a valuation of €2.7bn (that’s, respectively, $1.5bn and $2.9bn at current exchange rates).
We sell insurance products at cost, more or less. And then we add our membership fee on top. This model works very well Jean-Charles Samuelian-Werve
Alan’s main business and main source of income has not changed. The company is a health insurance company created for the 21st century. After getting approval from regulators, Alan has built his own subscription engine.
The company can now hire clients of all sizes and from all industries. Large companies can adjust each parameter to create the right insurance package for them.
As for the 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 to make the user experience as seamless 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 instant transfer. The result is that he is often reimbursed before he returns home. France’s national health system will also reimburse part of it automatically, but that usually takes a few days.
“We continue to implement our model, which is 100% based on the accident rate formula. We sell insurance products at cost, 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 that he generates an annual income of 200 million euros.
Not just an insurance company
Alan’s founders have been clear about their vision from the 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 healthcare professional near them using Alan Map. The company is also working with general practitioners so that they can answer their questions from a chat interface.
Not all of those side bets have worked out. A year and a half ago, Alan launched Alan Baby, a second app focused on your baby’s health. It provided a combination 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 following the acquisition of Jour. There is also a B2B service called Alan Mind.
The company provides exercises and content. Employees can also contact an expert when needed. Some companies subscribe exclusively to Alan Mind. Others add the Alan Mind pack to their current Alan contract.
With Alan Clear, Alan now also offers a way to try on glasses using augmented reality. If you find a pair you like, you can purchase 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 will be no new market 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 is a first baby step but there is still everything ahead, ”she added.