FinanceFox is consolidating insurance policies into one app, making the boring and stressful task of organizing your insurance far less of a headache
Swiss and German startup FinanceFox revealed a massive $28 million Series A funding round Wednesday morning, led by Target Global and Horizons Ventures. This is one of the latest investments in a growing trend of so-called “insurtech” companies that are starting to eat away at the share of venture capital going to finance startups.
The company’s app allows users to consolidate insurance plans and manage all claims in one place. It also gives them the opportunity to see new all-encompassing plans that will consolidate all their coverage into a single plan. FinanceFox talks up eliminating the middle man in brokerage, but it invites brokers to send their customers to the app in order to have them be organized with their policies.
When asked which services related to insurance he thought “still hadn’t crossed the digital barrier,” FinanceFox CEO Julian Teicke suggested the proliferation of insurtech startups didn’t mean tech had caught on.
“Almost all the mass market is far away from digital. There are some little features released here and there, but the entire experience is far away from where it is supposed to be in our age.” Put another way, this isn’t mere disruption but an inevitable progression of the industry. Companies, using the startup model or not, need to catch up.
“We see ourselves as an agent of change for the entire insurance industry and the insurance experience. We force the established players to think digital in all aspects, not only here and there and offer a solution to take the insurance industry and the insurance experience to the digital age.”
As a result, they are adding a couple other metrics into how they assess the fitness of a potential policy. It’s not just what a given customer needs in the policy itself, but how adapted the company offering it is to new technologies as a way to assess the firm’s efficiency overall.
“We do not only rate the product fit based on the needs of the customer, but also have an insurance rating that takes into account how ‘digital’ the company is. How fast they deliver answers, offers, etc.”
With 65,000 customers already, they are bullish about their prospects. They pitch themselves as “the point of contact,” cutting down on the administrative costs that can weigh down on competitors behind the digital times.
The company has built their business model on receiving reimbursements from insurance companies’ for their Q&A service.
“We are the point of contact if he has a claim, if he has a question, if he needs something insurance related. This reduces the administrative costs for the insurance companies and they reimburse us for this service we deliver to their customers.”
They face competition from companies like Clark and Knip, but the three are dealing with one sub-segment of the industry. A number of marketplaces for insurance policies have popped up, many who do not even offer their own plans. Canaan Partners led a $12.2 million Series A funding round for Embroker this past May. Israeli startup Lemonade raised $13 million at the end of last year and Chicago-based Insureon reeled in $35 million in October 2015. Israel-based Next Insurance, which also focuses on SMEs like Embroker, matched Lemonade’s round with a $13 million seed of their own in March. Trov, which also has an advanced communication set up for interacting with users, announced a $25.5 million Series C at the end of April.
Two thirds of deals in 2015 dealt with automating the insurance process according to Accenture. CB Insights reported earlier this year that a third of VC deals in the first quarter dealt with health insurance startups, though more businesses were popping up focused on life insurance and policies for renters or businesses. Most deals in the first quarter of the year were in the US, followed by Germany, India, Canada, Scotland and so forth.
Founded in October 2015, the company is managed by CEO Julian Teicke, with CEO Germany Hartmur Teicke and CEO Switzerland Michael John. They have 80 employees split among offices in Zurich, Berlin and Barcelona with plans to open their Vienna operations soon.
“We are in front of the fastest and biggest substance shift in human history from incumbents to new disruptive players. In the last year more information has been created than in all of human history before combined. Times have changed and they will change faster than ever. We offer incumbents a partnership model to help them transform.”