Why the French answer to Oscar Health is attracting international attention.
A digital health insurance company called Alan announced the closing of a $28 million Series A funding round today, opening the door to expansion for the French start-up, according to the organization.
In some ways, Alan’s grand aspirations—its digitally charged desire to change the fundamentals of healthcare insurance in its chosen markets—echo those of Oscar Health, the scrappy, young American health insurer that raised $165 million in venture capital this year alone.
In its early days, Oscar sowed comparisons to Uber and soon earned more than 100,000 customers, incentivizing users to focus on wellness. It has also charmed wealthy Silicon Valley investors. But the road hasn’t always been smooth for the data-driven insurer, which withdrew from New Jersey in 2016, only to return last summer.
Alan, meanwhile, sprouted several years after Oscar, in 2016. It has raised $45 million to date, from similarly deep-pocked tech investors, with 22 employees and 7000 customers at 850 companies, according to the start-up.
How Alan’s trajectory will shape out, however, is unclear. Right now, the company is tied to France, with plans to use its newfound capital to spread throughout Europe. It’s no secret that health insurance in the US differs vastly from arrangements in Western European nations, meaning that the similarities between Oscar and Alan might be limited to their suave marketing campaigns, Silicon Valley backers, and wellness- and data-driven approaches.
“By bringing superior technology, data, and design to the old-fashioned health insurance industry together with the top talent from Europe and abroad, we aim to make the overall health experience simpler, smarter, and better for our users,” Alan CEO and co-founder Jean-Charles Samuelian said in a statement. “Ultimately, we want to make health and well-being easy and accessible to all.”
The insurer’s top chief noted that Alan’s growth has been “organic” until now, a trend that he said ends with the Series A funding round. Oscar Health, too, exploded into US health insurance markets with the aid of $892.5 million to date, according to the start-up tracker Crunchbase. In 2018, meanwhile, Alan plans to triple its member base, with the goal of covering 100,000 people in 3 years.
So, who’s pumping money into the insurance start-up? Index Ventures, by way of San Francisco and London, and Xavier Neil, Open CNP, Partech, and Portag Ventures LP3 all contributed to the recent round, making it what Alan called the largest “Series A in the insurtech space in France.” Two years ago, in its seed round, Alan raised more than $12 million, with a hand from an innovation fund.
“They’ve created an innovative, fully digital, and holistic insurance offering—a very appealing alternative to traditional insurance schemes,” said Jan Hammer, a partner at Index Ventures, in a statement. “We’re excited to be backing Alan’s stellar team led by [Samuelian] and supporting them in achieving their vision of improving the quality of care delivered.”
Alan got its start after Samuelian’s frustration with the French health system boiled over, inciting his perceived need for change, a sentiment that has bolstered Oscar Health. Samuelian, who comes from a family of doctors, witnessed what he called “information mismanagement and the complexity of the health system” when his grandfather was diagnosed with cancer, according to Alan.
Again like Oscar Health, Alan launched with a focus on health insurance for small businesses, meaning companies with no more than 200 employees. It also covers freelancers and offer disability insurance to organizations.
Promising some of the lowest-priced plans in the market, the start-up relies heavily on its user dashboard and app. It doesn’t use paper, but it does focus on online customer service and digital payment journals.
Samuelian thinks of Alan as a tech company, perhaps the rising Google or Apple of Europe, as he recently said. And although Oscar Health hasn’t made such eye-popping comparisons, it has indeed invoked its data science and tech roots. Indeed, some analysts have attributed Oscar’s growing footprint to its innovative style—and Alan might just be a natural next step for an increasingly high-tech global insurance industry.
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