Alan - 2019 Letter to Shareholders

• 📈 Our performance in 2019
• 🚀 Investing in product for short and long-term differentiation
• 🚒 A better customer service
• 🐻 Brand Identity
• 🏋️‍♀️ A company is its people
• 🔭 Looking ahead

At Alan, one of our core values is radical transparency. We believe that a company should hold very high standards both internally and externally on this topic.

Since we started the company with Charles, we have updated our shareholders on a weekly basis to let them know where we stand in our journey to transform the health industry. Every year, we round up this genuine information in an email to all our investors which reflects on our successes and failures, as well as our ambitions for the coming years.

Because we want to remain as open as possible, we have decided to publish the content of this email and let a broader community dive-in our story. The following was slightly edited to remove sensitive information. We hope it will help a maximum of people understand how, and most importantly why, Alan makes a difference and helps people live their best lives.

Dear Alan’s friends and investors,

2019 was a remarkable year for Alan. We grew on existing and new segments, grew the team significantly with amazing people as we laid the foundations for a great future.

We set very ambitious objectives, met part of them; and most importantly we learned a lot on our go-to-market and product.

The strength of our product and model has been resoundingly validated by members who, in ever increasing numbers, have found significant value in our health insurance and health services. Many of them were delighted by the experience and have engaged with our brand on a whole new level as true allies and promoters.

In this letter, I will share about our achievements, how our model works, why it is working well, and why we believe it will ultimately change the way people experience healthcare and will even start enjoying interacting with it.

During 2019, we experienced rapid growth from an already high starting point. Our revenue grew 2.5 times from €20.1m to €50.5m (on January 1st) of signed Annual Recurring Revenue.

We ended the year with approximately 66k total members up 162% (x2.6) over the previous year (we started at 25k). We still have members onboarding so the numbers will likely be slightly up.

It is the result of our dedication into building an incredible product for our members.

We are pleased with the results of the past 12 months, but could have done better. Our accomplishments also included a 2.9x and 2.2x growth respectively for individuals & small companies, going up-market (8x growth on companies over 200 employees) and launching successfully a new segment (Hotel and Restaurants).

We grew the sales community from 8 to 26 people, while keeping improving our self-service for small companies and individuals.

It was not all green: we could have hired quicker during the year; it took more time than expected to onboard the sales team; our TV Campaign broadcasted too late, it was too complex and did not increase our brand awareness to the numbers we wanted.

All that being said, we have, and intend to maintain, an extremely strong balance sheet.

We created Alan to unlock frictionless, fair & friendly healthcare for everyone.

It is a very ambitious mission aiming to transform the healthcare industry completely. We decided to start by creating the best health insurance company and to progressively create a new category (your health partner). Our investments in our product in 2019 were about those two main topics.

🏭 Insurance offer for companies

We have built several great features that help us deliver a better experience for companies.

We can now build insurance products very rapidly : we are able to create new coverage tables, price them and onboard companies in a few hours.

This groundwork has proved extremely valuable for product/market fit and growth since we opened a new segment (hotels, cafés and restaurants), onboarded customers (very large ones) with customized prices and/or coverage tables and prices.

We have also enriched our insurance offer and tools with new features that appeared as deal breakers in 2018, such as options, cadres/non-cadres, Alsace-Moselle, better onboarding monitoring for HRs and better employee onboarding process.

🛠 Internalisation

Since early 2019, we have been building our own claim management and reimbursement system. We are making everything much more automated.

For our members, it means  :

• Shorter reimbursement time, better information, better customer service, better reliability.

• Shorter connexion to Caisse de Sécu (Télétransmission)

• Quicker quotes (“devis”)

• Better tracking of reimbursements and documents linked to them

For us, it means a much more scalable model where we can handle more members with a lean team. It is totally transformative for the insurance experience we deliver to Alan members and we are rolling it out on our whole portfolio right now.

📱 Mobile autonomy

To provide fluid healthcare for all our users, we strongly believe in a mobile-first experience of health insurance. As a consequence, we delivered major improvements of our mobile app in the last months.

Companies, employees, individuals can now fully onboard on the mobile app. Whenever they need medical care or consultation, our members can easily search through their coverage table and check up to what amount they can be reimbursed.

We have also implemented new features so that Alan members can manage their reimbursements and contract more easily. Document scanning, which allows users to send bills and quotes in a few seconds, has been considerably improved.

👩‍⚕️ Healthcare Services

Our vision is to become more than a health insurance: we want to be our members’ partner for better living, by helping them manage their health proactively.

As such, we have developed several health services in order to provide our members with an increasingly complete and immersive health experience.

Among them:

• Alan Map on Mobile with an improved usability to help members find doctors (search history, better search suggestions).

• A new discovery experience helping our members to better use our range of health products (Telemedicine, Alan Map, Address Book)

• A Doctor Address Book which allows members to keep all of their doctor information in one place

We have also started engineering work on Proactive Care and mobile journal notifications to continue building a strong relationship with our members about their health.

We had a 10x increase in only two months of our Monthly Active Users (MAUs) on health services.

We set ambitious targets in 2019 to improve the quality of the service we deliver to our members.

We didn’t provide to our members the level of service that we wanted to at the beginning of 2019. The answer time on our chat was degraded for a couple of weeks in February and March, and our median answer time skyrocketed to more than 2.5 hours in March.

We took immediate actions to reduce our time to answer at that time: time to answer decreased below 9 min in April.

We focused the rest of the year on longer-term actions to provide a better level of service to our members.

• We increased the size of the Care team from 12 (beginning of 2019) to 40 User Care Experts today.

• We started to work with external resources to free up some time for the team during specific peak periods

• We started to develop new ways for members to reach us (asynchronously), and provide contextual help to allow them to navigate our product autonomously.

Those initiatives allowed us to reduce the time to answer to 5 minutes at the end of 2019, despite having to face more than double the incoming traffic. We still have some hiccups in early January 2020, especially with our third party providers (some delay on Tiers Payant cards in a few cases), but are solving that quickly.

Our ambition is to drastically scale the impact of the team in 2020, by working on reducing contact rate and improving care efficiency, while maintaining our level of service.

We updated our brand platform and brand identity (with FNDR and design.studio). Alan’s brand has proven to be a major differentiated asset in the journey of becoming a relational leader. Our new identity intends to materialize our values and product pillars.

It has been rolled-out during the year and received excellent feedback from the market.

💚 Net Promoter Score

We are now measuring quarterly our Net Promoter Score and we have a NPS of 70 for our members. We are proud of that result and will keep on improving it.

🏆 Attracting and retaining the best

Our team grew from 64 to 164 people (+100), and we keep attracting people that are leaders in their area of expertise, who impress us with their skills, benevolence and willingness to contribute to our mission. As of January 2020, the team is composed of:

• Product & tech (60): 37 engineers, 7 Data Scientists, 6 Designers, 8 Product Managers & 2 User Researchers.

• Sales & growth (35): 6 growth & communication, 25 Sales, 3 Sales Strategists & Operations, 1 Company Lead

• Insurance, Ops & Care (51): 7 Insurance & Operations, 44 User care experts

• Corporate functions (12): 3 finance, 3 workplace, 6 People & Talent

• International (4): 1 HQ, 2 Spain, 1 Belgium.

We are very proud that leaders joined us in every part of the company. Below just a sample:

• Engineering: Miguel Gomard (former CTO at Meetic), Rémy-Christophe Schermesser (former Algolia), David Mercklé (former French Ministry for Armed Forces), Alexandre Gerlic (former Front and Intercom), or Yoann Aubineau (former Criteo).

• Growth, Sales, Marketing, Brand: Ludovic Bauplé (Business Lead - former VP B2B at ManoMano), Alexis Jakubowicz (Brand Lead - former Brand Director at Galeries Lafayette).

• International: Augustin Mine (International HQ - former ofo/Bain Capital), Manuel Pujol (Spain GM - former Spain GM Uber EATS); Cedric de Vleeschauwer (Belgium GM - former Showpad EMEA), Ana Zamora (Operations for Spain, former Mercer Spain).

• Product and Design: Florie Arlegui (Product, former Google), Gabriel Hubert (Product, former Stripe), Marie Deshayes (Design, former Lunchr).

• Insurance and Ops: Paulo Gemelgo (Insurance, former ACPR/IGAS), Sophie Bussières (Ops, former Kamet).

We increased gender diversity, going from a low 28% to a better 41%. We still have a long way to go, especially on technical (female & non-binary composing 18% of the Engineering/Data communities) and senior roles (15% of female & non-binary are at E or above).

Our success is only the product of this talented, smart, hard-working group, and I take great pride in being a part of this team. Setting the bar very high in our approach to hiring has been and will continue to be the single most crucial element of our success. We have managed to build a team of high-achievers who push for excellence, leave their ego at the door, and are focused on what is right for our members and the company.

🏛 Culture

Our very specific culture requires us to think of our organization and interactions all the time. We still have a lot to do.

This culture is an excellent tool that has allowed us to achieve 10x team growth in two years with no significant problem. Investing in culture and virtues since the first day has made a massive difference for us.

Our playbook is the combination of principles that drives how we build the company, our team and our product:

Fearless ambition:

• We shoot for the moon, then roll backward. We dare to imagine how big the upside is.

• We take the hard way and focus on A+, uncomfortably exciting problems.

• We deeply care about our members and how we can transform their experience for the better.

• We are non consensual and try to be right. We accept that people will say our ideas are bad, and we’ll prove them wrong.

• We are frugal and ambitious: we accomplish more with less, and we blitzscale parts of the business when needed.

Distributed ownership:

• We give the power to make decisions to the people who build things.

• We are positive to new ideas, yet we challenge them to make them better.

• We push people to follow their instinct, make provisional decisions with 70% of the data, fail and iterate.

• We build frameworks so people can use them when they need

• We have accountability to make everyone responsible for their successes and mistakes

Radical Transparency:

• We believe in being fair to our members, in offering them a delightful and frictionless experience, in being friendly to them.

• We give access to everything to the team. We take time to explain the hard truth

• We always try to explain the why to our team, our members, our partners

• We share all our dashboards and metrics to the team. We focus on a few metrics

👩‍🏫 Business basics

Regardless of how well we may be doing at present, we need to ask ourselves how success will endure over a long period of time as we are only at the Day 1 of Alan.

We are encouraged by a number of market trends that indicate strong demand for our service in both the immediate and long-term future.

First, health systems can’t keep up with the way we live. The recent crisis in our hospitals in France is a great example. Doctors are all affected by the pace of technology. People are more and more aware of the impact of their behaviors on their health and well-being and lack the proper tools to address that.

On top of that, consumers are becoming increasingly comfortable with Mobile and the Internet for industries that seemed too complex in the past (like banking). Software will help us offer personalized, quicker, delightful and friendlier access to care.

👶🏼 Where we are today

In February, we will be 4-years-old, and we have started to transform the health insurance experience in France. We are still very small compared to our market and infinitely small compared to our ambitions.

🧿 Our vision

Our vision is to change the way people access healthcare so they can even love the healthcare system. It means delivering frictionless, fair & friendly healthcare for everyone.

In 5 years, we want to have radically improved and simplified how our members access care in most countries in Europe. In order to do that, we want to create an experience that makes them open the Alan App every time they are concerned about their health.

✳️ Short-term

Our Strategy for 2020 is:

1. Keep the same level of growth in France: solidifying our position in the tech and HCR (Hotels, Cafés, Restaurants) segments, going up-market and opening-up two new markets.

In April 2018, we targeted 100k members within 3 years and are on track for it.

2. Amazing and scalable health insurance experience for our members:

• Instant insurance

• Scalability: keep a very high NPS (above 70) while limiting the growth of the care team (automation)

3. High retention on our health features which translates into a high perceived differentiating value of our health insurance product

4. We are live in Spain and Belgium

🏁 Conclusion

We are very fortunate to have in place an extremely strong team that has both the experience and the vision to propel Alan forward in what we believe will be a very dynamic future. As we continue to roll out and improve our service, we are optimistic that we have the potential for even greater impact ahead.

I would like to thank you for your continued support over the past four years, and I look forward to your continued help as a member of the Alan mission! We are only at the very beginning and all the road is ahead of us.

If you want to help us, please keep challenging us so we can always increase our standards, make introductions to large companies’ leaders you know in France as we go up-market, and please connect us with the best people you had the chance to interact with, so we can attract them and make Alan the world’s best healthcare company!