Alan - 2022 Q3 Letter to Shareholders

• Building a new category: one-stop health partner
• Flywheel 1️⃣ : Insurance
• Flywheel 2️⃣ : Health services

Dear Alan friends and investors,

We keep delivering on our mission to make personal, proactive and holistic health part of people’s daily lives. The team is more committed than ever to our mission.

We had a strong quarter and continue to outperform our objectives across our 3 global north-star metrics. We grew to 353k members, €222m Signed ARR at an 8% total gross margin.

Our main focus is to keep innovating for our members and admins (more below) and are adjusting pricing to reach an estimated 2023 total gross margin in France of c.13% (which is still below the market average of 15%). You can find more about it here (in French).

Such innovation and pricing strategy continue our path to profitability while allowing us to remain competitive from a value/price perspective.

Our revenue is growing at 75% while our headcount is growing at c.30% and this exemplifies our operating leverage and our focus on operational excellence, automation, maximum efficiency, …

The fundamentals of our business remain solid:

• We acquire customers at a fast pace, in different industries (Retail, Hospitality, Wholesale, Manufacturing, Tech) and of all sizes.

• We acquire them at a price which is in line with the market, we are not cheaper. It is our differentiation that makes our success. On the other hand, we see more and more competition forced to sell at an unsustainable loss to keep customers.

• Thanks to our experience, our customers stay with us.

Some of our customers are starting to see us as a “true health partner”, much more than just their “health insurer”. Below are a few quotes (in English and French) from customers illustrating this:

• “During Covid, Alan scored a lot of points because it was not easy for our employees to communicate about their medical anxieties. Your online services were very helpful to our employees. You fell right into it.”

• "We chose Alan because the price was more attractive than our previous health insurance provider [...] I didn't know that health services were available with Alan, I didn't see anything on the website. You should explain that Alan is not a regular health insurance"

• "Alan je vous aime, vous me remboursez vite, vous m'expliquez tout, vous avez une application claire et facile d'utilisation, vous me permettez de voir des medecins en ligne gratuitement et rapidement, merci, vous m'avez reconcilliée avec le fait de m'occuper de ma santé ❤️" (App Store, 23/06/22)

• "Surtout avec les enfants, c’est super de pouvoir discuter rapidement avec un professionnel, ça évite de se déplacer pour pas grand chose parfois ! Je recommande sans hésitation :)" (App Store, 27/08/22)

Creating a new category and fighting inertia takes time, and we are very committed to it. Positioning ourselves as the one-stop health partner is the only way to build the future of health.

We have strengthened our positioning as thought leaders on the “future of work” and “health at work” with the 2nd Edition of our Mental Health Barometer and a round table that gathered more than 800 people.

Our product is continuously improving in this direction with the introductions of our health partner experience, the prevention assessment survey, proactive care notifications, Clear and Mental Health. Our app and services have measurably improved since last year, and it is only the beginning.

Our Prevention Assessment Survey

France 🇫🇷

During Q3 we invested in a lot to keep transforming our experience at the service of our customers.

Supporting profitable growth

• We have strengthened our value proposition (in particular for large and very large companies)

  • The "digitally-challenged members" now have access to an education system before and after sign-up to make sure they can use our tools

  • Our app is becoming available in English 🇬🇧

  • We are enhancing our customer support with a callback option either initiated by one of our user care experts or directly by some admins or members for specific cases.

• We revamped our website resulting in a c.80% increase of the self-serve funnel conversion rate

• We keep transforming how “Prévoyance” claim management is done in a delightful way

Scaling our operational model

• Our admins and members are becoming more autonomous

  • Members are more autonomous to understand their overpayments

  • Admins have now a clearer guide to setup their DSN (standardised process to transfer key payroll information about the employees to public administrations and insurance companies), check status, and fix missing payroll issues thanks to DSN section revamp on Admin dashboard

• We have continued empowering our customer support through:

  • An improved contact experience

  • The automatic detection of some specific payroll tools widely used by small companies (TESE) which will prevent manual actions on our side.

Belgium 🇧🇪

• Strong performance from our Sales team, who all reached or surpassed their Q3 targets.

• We signed our very first franchise network with a lot more potential for 2023 in this specific segment

• We have very high demand for Mental Well-being

Spain 🇪🇸

• We launched our book, Healthy Business, in Spanish.

Presentación del Healthy Business Book de Alan

• We signed our first contracts with Alan Fresa, our new health plan which is very innovative for the Spanish market

• We closed our biggest customer to date with 1.8k employees.

• We increased online booking availability (+450 agendas / 7% increase vs. last Quarter) and reduced error rates.

• We improved our dental offering.

Health Partner Experience

• We revamped our app onboarding so members experience personalized health services faster when starting with Alan.

• After setting up their insurance, they now complete a prevention assessment survey on medical checkup history, stress, diet, sleep and physical activity.

• This triggers personalized health reminders and puts them in touch with a dietician, psychologist or physiotherapist, as relevant.

Mental Well-being

We have a strong momentum for SMBs (+62% vs. target), and we continue to onboard great flagships and win deals against competition.

Products improvement

We shipped a unified Admin dashboard for our new customers with Insurance & Mental Well-being contracts.

• We made a tailored prevention plan at company level based on a wellbeing assessment conducted across all employees

• We build digital manager trainings on workload, uncertainty, team work, work life balance and harassment.

• We are launching a series of MasterClass featuring leading athletes about holistic health and performance.

Clinic

• The Clinic platform runs across our France, Belgium and Spain apps, with over 75+ health professionals chatting (1k conversation a week) and running video calls (100 a week) with members

• Satisfaction with our health team across specialities (psychology, dermatology, physiology, nutrition, sleep, sexology, new: back pain) remains high across both chat and video sessions (>4.5/5).

Clear

We made great progress with clear in Q3:

• We reached our 900th order this month. The first 100 were submitted in 78 days and the last 100 were submitted in 24 days.

• Members can now find a personalized selection of glasses, based on their face shape in the Alan app, to offer an even more tailored experience.

Flywheel 3️⃣ : Alan as a Service

We continued working on the civil servant opportunity (named “PSC”) to build further conviction. There are good reasons to believe this could be a great opportunity for Alan given our expertise on collective contracts and how we could differentiate in terms of innovation and services.

Team

• We hired 29 people during Q3 and are now 526 Alaners. We are in line with our staffing plan.

• Our hires over Q3 are balanced equally between Operations, Product and Growth

• We keep increasing our overall talent density and attracting top talent such as Anna Keroullé, John McDonald, and Vincent Lambert. More announcements to come!

Macro context and future

In the current uncertain market (inflation, energy shortage, war in Ukraine…), we are keeping Alan antifragile. We are doing that by adapting our operations, and making fast-paced, high impact decisions, for scale.

We are continuously building towards profitability. And we are on track to get there by 2025. We have a fortress balance sheet, and we will not need to raise more capital to get there.

Our focus during this quarter is mostly delivery of our plan:

• 1️⃣ Execute our plan to achieve our ambitious End of Year targets (both growth and margin) through acquisition and renewal

• 2️⃣ Mental Well-being: focus on the technical foundations (dashboard, onboarding, adoption) so we can accelerate product differentiation in 2023

• 3️⃣ Plan for 2023 with a focus on investing in innovation and product development.

We are more committed than ever to our mission to make personal, proactive and holistic health part of people’s daily lives, striving to be the world’s most member-centric healthcare company. We are excited by seeing it become alive.

Thank you for supporting us.

Jean-Charles for the Alan team.