Healthtech startup Alan is intent on revolutionizing health insurance for SMBs in France. Fintech startup Payfit is looking to do the same in the payroll and general HR sphere. Seemingly different industries albeit with similar goals, the two have come together to bring a holistic solution to businesses that will change the way they manage employee benefits.
The partnership was triggered by effective observation of Outside Insight on the part of both startups. By keeping an eye on other players beyond their immediate industries, as well as on new regulations that worked in their favor, they took advantage of major opportunities for collaboration and growth.
Even if they weren’t looking for partners, the pairing seemed like a no-brainer. Both startups are rising to the top of their respective games, and they both target the same businesses, serving different but overlapping purposes. As margins are thin particularly in the health insurance space, it will be a volume play for both of these tools. The more they can offer customers the better.
What Alan and Payfit saw when looking out
Policy and legal insights
The Employment Security Law was passed in France, effective 1 January, 2016, requiring all companies to provide “mandatory supplementary health insurance coverage” for employees. This effectively gives more business to private insurance companies, but it also makes health benefits a bit more complicated at the HR level for French companies.
Funding and investor confidence
In October, 2016, Payfit snagged an easy $5.6M in investments, signalling the massive demand for this type of software and investor confidence in this particular player
At nearly the same time, Alan announced a $13M funding round after winning approval from regulators as an “official health insurance company.” This is the first new health insurance company in the region in 30 years – a big deal for the startup.
Consumer feedback, social media and share of voice
Customer dissatisfaction with current insurance offerings was not a secret. Antiquated and outdated healthcare offerings opened the door for an innovative solution like Alan to rise quickly
Timing
One insight that’s often overlooked is timing. For innovations like Alan to work, businesses and consumers had to be comfortable enough with choosing benefits online. As well, the recent influx of SMBs requiring this type of service, particularly startups, and Alan’s clearance with regulators all coincided to make this the perfect time for it to take off
Both companies thought about the employee benefits and HR industry holistically when evaluating their respective competitive environments. Rather than looking only at changes and players in Fintech or Healthtech industries, they saw themselves as part of HR tech, and that brought one another into their respective lines of vision, allowing for this potentially game-changing matchup.
