Alan's meteoric rise In the French tech ecosystem, “'' is both figurative and literal. A few years ago, the startup's offices were confined to one floor of a nondescript office building near Canal Saint-Martin in Paris.
Over time, the company added another floor, and then another… Today, the 550-employee company also occupies the top floor of the building. There is a kitchen in the corner and a common area with a beautiful view of the typical Parisian gray tin roof.
This morning, Alan's co-founder and CEO Jean-Charles Samuelian-Werve and Chief Revenue Officer Ludovic Bauplé held a press conference with reporters. Some cover technology startups, while others focus on the insurance industry. It's an unusual combination of reporters, but that's because Alan is an unusual company.
The company originally started as a health insurance product to complement France's national healthcare system. French companies are required to offer health insurance products to all employees upon joining the company. More than 500,000 people are currently covered by Alan's insurance products.
Image credits: Romain Dilett/TechCrunch
But Alan is also a technology company that has raised quite a bit of funding. The latest Series E funding round of €183 million ($196 million at current exchange rates) brings the company's valuation to €2.7 billion ($2.9 billion).
Alan has integrated and automated as much as possible for the insurance part of its core product. It's also expanding to other services, and its app can be like a one-stop shop for all things health.
After years of explosive growth, the French tech ecosystem is running out of money and many companies are looking for a quick exit, unless you work for a generative AI company. It's slowing down. Alan is one of France's largest private technology companies, so it's interesting to pay close attention to the company to understand how it sees its future.
Loss of $63 million remains in 2023
Although 2023 revenue increased by 39% compared to 2022, Alan is still incurring significant losses. The company reported a loss of $63 million (€59 million) in 2023 alone.
However, the situation is improving. Last year, 5,000 companies became new customers. In France, Alan is no longer just a trendy health insurance company for tech startups, as his new clients include Celio, Duracell, Mantu, Clinitex, and even a French National Assembly official.
Alain also operates in Belgium and Spain. And in Spain, for example, the difference is starkly clear, with Allan citing N26, Cabify and Eventbrite as new customers there – in other words, technology companies with local teams in Spain.
“Profitability is a central theme for us. Our goal is for France to be profitable in 2025. And we are confirming that once again,” said Ludovic Baupre. . As for other markets, the company expects them to return to profitability as a whole by 2026.
“Our cash position is more than €180 million. Our solvency ratio is currently 450%, which is well above the minimum requirement and double the market average,” Bodle added.
Image credits: Romain Dilett/TechCrunch
Does this mean Alan's funding round is over? This part is a bit murky as it has become very difficult to raise late-stage rounds at high valuations. Things may change. And of course, never say “never.”
“There is no need to raise a new round in order to stay on track and maintain this growth rate until we reach profitability,” Jean-Charles Samurien Warve said later in the conversation. “At the same time, we have received unsolicited offers from investors in the past. . . . We will continue to monitor them, but that is not really our strategy today.”
Increase revenue, not costs
Alan's path to profitability involves growing the company's revenue without necessarily growing significantly as a team. Currently, Alan's gross profit after all medical reimbursements is 10%. However, when all expenses are included, the net profit is negative at -17%.
Alan expects revenue to increase by 40% in 2024. However, the company plans to hire only 30 people, which is an increase of only 5% in the number of employees.
That's because Alan's service is designed to scale well without necessarily adding more people. This is a self-service app and service. Refunds are automated wherever possible, including optical character recognition, an in-house developed fraud engine, and automated bank transfers.
Preventive care on the app is also a big part of Alan's services, focusing on eight different topics from mental health to back pain. This part is primarily handled by a library of videos and his 80 medical professionals who partner with Alan to answer questions via a messaging interface.
Alan also said that artificial intelligence will be key when it comes to scaling. Like many of today's customers and his team, some of the interactions between Alan's customers and his team are optimized by artificial intelligence.
But every team leverages artificial intelligence in some way. Alan CEO Jean-Charles Samuelian-Werve said he has now seen a 40% increase in productivity across all employees.
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Mr. Samuelian-Werve is also a part-time co-founder and director of Mistral AI, a trending French basic model manufacturer. In fact, Mistral AI's office is located in the same building as Alan's office.
Artificial intelligence could emerge as an alternative for growing teams at big tech companies like Alain, although large-scale funding is difficult to come by in France.
Alan's company culture is very specific, so this may not work for all technology companies. Everything is documented and completely transparent with regular check-ins from teammates. Nevertheless, this is a practical example of the real-world impact of artificial intelligence on the financial outlook of a growth-stage technology company.
The roof of Alan's office. Image credits: Alan