Alan - Q3 2020 Letter to shareholders

• 💪Where you can help us
• 📈Our performance in Q3
• 💚Product
• 🌍International
• 📯Brand Awareness
• 🏆Team
• ⚖️Finance & Governance
• 🔭Looking forward

In July 2020, we published our Q2 2020 letter to shareholders in our blog. As we share quarterly updates with our investors, we want to keep sharing them with our community.

Please find below the email we sent to our investors following the third quarter of 2020. We slightly edited it to remove sensitive information.

Dear Alan friends and investors,

I hope you are all safe as well as your family and friends. The Covid-19 crisis has proven to be a great challenge, and it is not over yet. I am grateful to all Alaners for the work we do to build the best product for our members and the community.

Our strategy and definition of success for 2020 was built around two major blocks:

1. Achieving our numbers in France.

2. Proving we can build an international organization.

We also had an objective of “high retention on our health features”, which we viewed as too small during the year and decided to accelerate our transition to being a personal healthcare partner for everyone.

We are on track to achieve our COVID-adjusted plan shared with the board in June:

1. We should be able to reach 140k members (COVID-adjusted plan). If the situation around the second wave keeps worsening, it will be a challenge.

2. We are live in Spain and Belgium, and in both countries we have already signed first clients.

3. We have revamped the design of our app with tailored feed and stories, released new health events and healthcare professionals tabs, proactive care notifications and the medical chat to all our members.

1. Better Life Unit Lead: connect us with profiles who could help shape our health services strategy (CEOs, COOs, VPs, Business Unit Leads of healthcare or freemium companies).

2. Europe B2B org benchmarking: connect us with high-growth CRO or head of sales which scaled B2B businesses in Europe to benchmark our organization for next year.

3. Very Large Companies Sales: connect us with high-growth CRO or head of sales which penetrated the very large companies market, to understand their pricing strategy.

Our signed Annual Recurring Revenue grew from €60m to €70m. We ended the quarter (October 1st) with 93.5k total members vs a target of 92.8k (101% of our COVID-reforecast to reach 140k members).

Member and monthly growth since January 2019.

Sales acquisition is below YTD target (63% of the target), mostly due to the months lost on COVID. We see it as a delay, not being under dimensioned. We are starting to catch-up on closing (we are 100% on opportunities). It is our main focus for the year to end.

New marketing initiatives such as our first Keynote and the book Healthy Business helped connect with very large companies. We signed several flagship companies.

We have also revamped our insurance selling and pricing. Sales can now build a tailored insurance product in less than 2 minutes.

Shifting to a Personal Healthcare Partner app

The design of our app has fundamentally changed, with stories (relevant content, alerts, personal reminders), proactive care campaigns, a tab focused on health events (reimbursements, documents) and a tab focused on healthcare professionals members have interacted with.

The new home page, healthcare professionals and health events tabs.

Delivering a great member experience

We now provide our members with detailed explanations for pending care events, which makes members autonomous and decreases contact rate (-30%). To reduce onboarding friction, we released a new mobile view of delivery status of their physical insurance card - it was the largest pain point in 2020.

In our desire to simplify access to care, without ever impacting our members' finances, we now reimburse instantly or in less than an hour in 74% of cases.

We also kept a very quick time-to-answer to our members. Our median time to first answer for sync conversations (via chat) has been below 3 minutes since mid-Feb.

Number of conversations and median time to first answer (sync).

Delivering a great company experience

Our Company Admins NPS is at 78 (+6 in a quarter) and 43 for Company Accountants (+2). This can be linked to the shipping or updates of key features (insights platform, disability history of claims, new onboarding flow and more).

Desktop view of the Insights’ platform. Data is updated monthly.

We also built a unified web-based experience for sales teams and customers to discuss and decide together on product tailoring and pricing before activation.

Taking Covid-19 into account

In order to adapt to the new Covid-19 phase in France, we updated our symptom checker to the “2nd wave” context (e.g should I get tested?), added a Covid-19 indicator updating members on the situation within their department and, finally, updated content for companies looking to manage the second wave of the pandemic.

The Covid-19 indicator.

Regulatory

We received approval from the French regulator (ACPR) to operate under Freedom of Services in both Spain and Belgium.

Growth

Alan is officially live in Spain: we have signed our first customer and on-boarded their employees. We also signed our first customers in Belgium, and are targeting on-boarding in Jan-21.

Healthy Business, Alan Check-up #1

We launched a book on September 15th, Healthy Business, supporting Alan’s approach on how corporate culture fosters employee’s health and wellness as much as excellence.

We also held our first Keynote (Alan Check-up #1) at Station F, September 16th.

Media

We had media coverage during the cycle:

• GP Bullhound included Alan in its next 50 European unicorns predictions, and CB Insights included us in the 250 most promising fintechs..

• Les Echos wrote a piece on our public and transparent salary & equity grid.

• We were ranked 2nd in LinkedIn’s French Top Startups rankings, and invited to a live Q&A.

• We were featured in articles from LeMonde and LeFigaro on the future of work.

Healthy Business in particular, raised interest:

• TV interviews with BSmart and BFM TV.

• An opinion column in Les Echos on how Covid-19 will transform corporate culture more than ever before.

• An interview with Brut. - on the importance of taking risks, failing and learning, our no-meetings policy and more.

• A morning radio intervention with Radio Classique.

Our team grew from 213 people to 241 (+28), and we need to double-up this pace to reach our year-end target. To succeed, we invested in our Talent acquisition capacity.

We have made key hires:

• Medical Team: Pierre-Auguste Beaucoté (Doctor) and Sébastien Fredeau (Medical Ops).

• Finance: We hired a CFO (name not yet disclosed).

• Product: Rob Olson (Engineer), Alexandre DuBreuil (Engineer), Marion Deneuville (Product Manager), Paul-Marie Dubois (Product Manager), Sébastien Phlix (Product Manager).

• Insurance: Odile Kusnik.

Our gender balance overall is stable compared to the last analysis (females represent around 40% of Alaners right now) and team happiness is high (eNPS at 50).

Gross Margin

In a challenging context, our 2021 margin is estimated to be around 6% by end-of-year (including a 2.3% exceptional tax on health insurers following Covid-19), below the objective of the pre-Covid plan (11%).

We have put in place a good strategy to accelerate growth while increasing margin over time, always being fair to our customers.

Cash-burn

Open CNP Shares buy-back

This summer, along with the team and some of our investors, we bought back a portion of the shares of Open CNP. Our strategy and partnerships with CNP Assurances remain the same and we continue to consolidate our cooperation. You can read more about it here.

Today, with brand awareness increasing, we are seen as an exceptional health insurance, and more and more as a personal health partner. Still, a lot needs to be done, as we have the ambition to be a home screen health app, in the pockets of millions of users, all over Europe.

The last 50 years have been about the industrialisation of the system to make it work for everyone, and it ends up being personal to no one. And the amount of information, complexity, and lack of empathy create a huge mental load for every stakeholders: health professionals, and users.

We believe that technology + humans are going to deliver a new version of health. Nobody is standard and we want healthcare to be personal, and we think that we should address it vertical per vertical, to give to each of our members the feeling that healthcare is personalized for them.

To do so, we will focus on two core product components for Q4, and 2021.

First, we are going to keep developing our insurance offer for France, Spain & Belgium. In France, we want to make sure we can cover companies of all sizes, with a 100% medical loss ratio combined by a membership allowing transparency on the value we create. We want to provide real-time insights platforms and support company health initiatives.

Then, we want to be a personal health partner app that can be used whether insured or not, and we will launch some very exciting new features. We believe these are the right bets to become the first health super-app in Europe.