Alan - 2022 Q4 Letter to Shareholders

• 1️⃣ Strong results in challenging market conditions
• 2️⃣ Fast-tracking the one-stop Health Partner approach
• 3️⃣ 2023: innovate as one-stop health partner & road to profitability

Dear Alan friends and investors,

2022 has been a challenging year with war in Europe, high inflation, energy shortages, a spiraling cost of living for our members, and for the healthcare system. We stopped counting the number of articles about how much our system is collapsing.

At Alan, we believe we can help support and improve our health system. We believe in a future where being in good health is more intuitive than scrolling on TikTok and where healthcare goes from reactive to preventive.

Our relentless focus on improving health & prevention for members and companies continues to pay off. Despite the context, in 2022 we have managed to:

• Increase Annual Recurring Revenues (ARR) by 62% to €258m, and exceed 380k signed members by the end of the year.

• Increase gross margin (in France) from 2% in 2021 to 7% in 2022, thanks to the increased value we create for our customers and innovations to reduce the costs of health.

We believe that such results in such economic conditions, underscores our anti-fragility, and the strength of our model. Despite these great steps, we are still only at the beginning of revolutionizing healthcare and we will continue innovating for our members and corporate customers.

If the context has been changing, our mission remains the same: making personal, proactive and holistic health part of people’s daily lives. We are  striving to be the world’s most member-centric healthcare company.

We closed 2022 with a fortress balance-sheet that allows us to invest countercyclically in our product and team (when others are contracting and laying off).

This year, we have validated many assumptions of our model:

We over-performed in our core segments in France 🇫🇷

• We beat our targets in Small and Medium businesses, the Tech and Hospitality verticals, as well as business start-ups.

• We also had very promising signs in several key segments (retail, large companies).

We had great first signs of product market fit in Spain 🇪🇸

We closed 2022 with 7.3k members, representing year-on-year growth of 283%.

We saw very positive market signals:

• We now work with companies like Webhelp and Mantu and have positive momentum to close more Large deals in 2023.

• Alan Mind and Alan Fresa cash plan positioned Alan as a holistic health partner, differentiating us from traditional players.

• Our product is delightful for admins, the quality of Care is excellent.

• We still want to further differentiate the member experience. A lot of surprises are coming!

We performed strongly in our core business in Belgium 🇧🇪

• By more than doubling our member base to 25k members, we have proven that our model is solving real pain points. Winning several large companies such as Louyet and Loterie Nationale is testament to this growing maturity.

• By materially exceeding our targets on mental well-being, we also got the confirmation that our customers value the one-stop health partner proposition offered by Alan.

We kept scaling our ops and care to serve our members with radical innovations:

By internalizing disability claims, developing our own optic shop with Alan Clear, and receiving the disability license as part of our corporate reorganization, we kept innovating to increase the scalability of our model, while also expanding the strategic cards we have at our disposal.

We kept increasing the talent density of our team

The team reached 520 Alaners at the end of 2022; 92 people more than at the start of the year. Talent density and diversity has kept increasing this year and makes us extremely confident in the current team to deliver on our ambitious plans.

Since Q4 2022:

• We parted ways with Gabriel Hubert who is launching an AI company with his first start-up co-founder. This departure is regretted (and we are very happy for them!) and we see it as an opportunity for other tenured Alaners to grow in responsibility.

• Alaners have been taking over new roles: Thomas Rolf is now Product Lead, Lucie Leflour is our new Head of Sales in France, Sebastien Fredeau leads our Enterprise Segment, Juliette Raimbault is taking the leadership of the People Community, and many more …

• Experienced talent has also joined the team (Mike Benchimol (ex COO Checkout.com), Julien Femia (ex Senior Engineering Manager @ Spotify)). A big welcome to them !

It is satisfying to see more momentum around the thesis we defined 7 years ago of building a digitally native payor and provider of healthcare services with the best user experience (see The Biggest Company in the World by a16z).

To do so, we have designed our product organization with two goals in mind:

Offering members the best partner to take care of their health

We kept improving our health insurance

We released the English version of the mobile app in France. This is an important boost for the thousands of members — especially in the hospitality and tech segments — working in France  without speaking the language.

We made the insurance card now available in the iOS Wallet:

We have automated the treatment of our osteopath invoices with artificial intelligence, allowing for delightful instantaneous reimbursements for our members. We can now process more than 70% of those in just fractions of a second.

And our health services:

We revamped the sessions experience to make it easier for members to to find experts by better highlighting specialities (coaches or therapists).

We launched Meditations. It’s the second most popular wellness technique for our members (after physical exercise).

We further improved our offer range of glasses on Alan Clear and introduced a “solar clip” to appeal to a wider public, and help more and more members take care of their eyesight, at a lower cost.

We introduced a new prevention tab, showcasing how Alan can help across 15 health stories including diet, stress, sleep, physical activity, dental care, and skin care, to help members take care of their health in a proactive way.

Our continued efforts to polish members’ experience led to an overall ⭐️**5/5 rating in the France iOS app store**.

We released a new dental experience in Spain 🇪🇸 to improve access to great dental care for our members and we kept improving the clinic, with now 77% of all psychology consultations handled by our own clinic and rated at an impressive 5/5.

We launched a video consultation service with GPs in Belgium 🇧🇪 to keep reinforcing our one stop health partner approach and delivering exceptional value to our members.

Offering customers the best HR investment to take care of their employees

With a continuously improved health insurance experience

We simplified the onboarding: Companies of 70+ employees can now onboard everyone to Alan with bulk invitations. It massively reduces the operational burden of our customers.

We rolled out cover by default: All large companies now have “cover by default”, to increase compliance while significantly decreasing the operational load on HR admins.

And key tools to boost wellbeing at work and fight work stoppage

We improved the training dashboard, to allow employers to invite their managers to a dashboard with training materials. It extends our footprint with managers and the value they can get while respecting data privacy constraints.

We enabled companies with 50+ employees to autonomously trigger a wellness assessment and prevention plan with a tailored audit and action plan.

Step back on 2022

And the above was only for the Q4 of 2022. If you want to have a look at the full year, he is a presentation of some of our key features launched (in French):

In 2023, after almost 7-years of operations, our strategy has never been as crystal clear.

We have the tools, tech, and talent to help millions of people in their health and well-being journey while being self-sufficient and profitable.

It translates into two main objectives:

1️⃣ Leading the one-stop health partner category

• We will keep delivering more value to customers (Admins, HR Directors, Managers) and members, through consolidation of our leadership on our insurance offering, Mind (mental health), Clear (vision), Clinic (prevention and access to care) and new health stories to come. Stay tuned.

While:

2️⃣ Increasing operating leverage

• Leveraging innovations, machine learning and software to better serve our customers at an ever lower unit cost.

We have enough capital to reach break-even in 2025 and the market-depth allows us to keep growing at 40% year-on-year both profitably and sustainably for a very long-time.

At Alan, we are only at the very beginning of building one of the “biggest company in the world” in a self-sustainable way.

It is so exciting to have the keys to drive towards our future together.

Thank you for supporting us.

Jean-Charles for the Alan team.