The Future of Insurance Podcast – Florian Graillot
Co-Founding Partner, astorya.vc
Season 2, Episode 5, December 1, 2021
Guest Bio
Florian is co-founder and Partner at astorya.vc, a European seed / insurance fund launched in October 2017.
He has been investing in tech startups for ~15 years, and his former positions include investor at Newfund, a tech VC based in Paris, and investor at AXA Ventures, a VC fund investing in European insurance startups.
Florian is an engineering graduate from Telecom ParisTech and business school graduate from HEC. He regularly writes and tweets about InsurTech, AI and Startups.
Highlights from the Show
- astorya.vc looks at early investments (seed/pre-seed), which they found to be a gap in the market
- Their focus is on Europe because of their ability to help startups in Europe given their experience and networks
- Their LPs tend to be corporates who would otherwise not be able to get in at early stages as they themselves are geared up for Series A, or, more often, B and C investments
- This focus exclusively on early stage and InsurTech has meant founders seek out Astorya.vc as an investor of choice, meaning they see more of the early startups than anyone (in addition to technology they’ve built to scan the market and spot opportunities)
- All of the activity in the market right now makes it even harder for corporates to spot the right places to focus their efforts, so having astorya.vc as a place to turn for guidance is even more valuable
- Astorya.vc focuses only on Europe because that is where Florian and his co-founder have a network, and they believe that at seed stage, it’s not just about money but what you can do to help the business, so they need to stay within the realm of where they can truly help as investors
- They try to invest in any business line rather than just P&C or Life or Health, Personal or Commercial
- They focus on B2B/Enterprise software, which is a function of their size and seed focus because B2C/DTC businesses tend to need huge rounds and it takes a long time to get to revenue
- This also fits with their network, again, allowing astorya.vc to help those they invest in more
- They like to invest in new risks where incumbents don’t have a competitive edge because there’s no (or limited) historical data, leveling the playing field between startups and corporates, and that allows the ability to leverage new approaches, data, etc faster and better
- Since they are investing in the enabling tech, it’s not about incumbents vs. startups, but rather InsurTechs enabling the market, including incumbents
- Seed investing is not about spotting unicorns as it is about anticipating trends, spotting needs and building companies step-by-step
- They start with spotting the needs in the market, identifying the best team to solve it, and then helping them go to market and grow
- Some of the needs they see are around parametric, cyber risk, downtime of networks and platforms, freelancing/gig work and more
- Trends in InsurTechs
- European startups are replicating what they’ve seen in the US
- Some geographic differences by sub-market, like tech-enablers/B2B solutions in France (like Shift Technologies); commercial lines in the UK, perhaps because of Lloyds (like Zigo); Germany is more Health-focused (like Autonova)
- In all markets, you see B2C trends like Luko, Bought by Many and others
- In the US, we see some places where established InsurTechs spawn new startups from alumni leaving to create something, but it’s a bit too early in Europe to see as much of this just yet with fewer exits like in the US that are generally needed to see this kind of activity
- Some of the European InsurTechs are achieving real numbers, like a B2C players in France acquiring as many new customers as a tier 1 mutual insurer
- InsurTech is unbundling the value chain, and especially between reinsurers and insurers as reinsurers are starting to work directly with InsurTech MGAs, with an estimated $1.5B in capacity going directly to InsurTech MGAs from reinsurers
- We see SCOR, Swiss Re, Munich, Covea and others making moves here
- This makes sense as reinsurers are all about and very good at managing data, and the InsurTechs are so often a data play, so it’s a really good alignment
- Since most InsurTech insurers start as MGAs and become full stack carriers, by design they will need a direct relationship with a reinsurer, so it seems natural that they’re starting that relationship more directly from the start
- Distribution will shift, but not from 0% direct to 100% quickly, but some lines and some segments will move at scale
- A proxy astorya.vc looks at is the share of e-commerce vs. brick and mortar, and in some segments in the pandemic, they saw the mix going to over 50% online, so those segments are signaling that they may shift direct more, even if not over 50%
- This matters for existing distributors and insurers who need to think about whether they could afford ten or 20% (or more) of their market moving online, direct
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Special thanks to Insure National for sponsoring this episode. Learn more at insure-national.com.
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