For me happiness is not in buying new things, but in contributing
Meeri Rebane, Co-Founder and CEO of INZMO. Interviewed by Evita Lune. Edited by Veronika Suhareva.
INZMO Ltd is an insurtech start-up established in September 2015 in Germany by the Estonian founders Meeri Rebane and Risto Klausen. The company focuses on providing an end-to-end innovative technological solutions to insurers, corporate partners and end customers to improve sales, customer relationships, claims handling and risk management. In 2016, the company received a boost in San Francisco from the largest start-up investor in the world — 500Startups. In May 2017, INZMO was named the best fintech company in Europe by the StartUp Europe Awards run by the European Commission. In December 2017, Helvetia Venture Fund — a Swiss insurer, has acquired a holding in INZMO and has invested a single-digit million amount in INZMO.
Evita: Funding is probably the most crucial challenge for startup entrepreneurs. How has your route been to get the company well financed? I read your interview after Parnu conference, where you said that one must meet more than 200 investors to attract the attention of two. Also, I read that you have spent significant time in US accelerator to get prepared for fundraising. How much have your traveled and how much has been the effort to get investors’ interest?
Meeri: When it comes to traveling, for the last three years when we established INZMO, I have not lived permanently anywhere. If somebody asked where my home was during the last three years, it was not very certain. In 2015 we moved to Berlin and participated in Startup Bootcamp, which was the first accelerator where we participated. It was extremely important for us to get out of Estonia. Because, if you have been living and working in Estonia for all your life, then you need some “kick in the butt” or this dramatic change of environment to understand that there is a way different culture to do business, to get funding and to sell services of your company. If you want to do international business, you have to think as an international businessmen.
We were in Berlin for seven months, we found three German investors, they were angel investors, and they co-invested with our Estonian angel investors. This is where we got our first round of funding. After Berlin we were few months in Estonia, then I moved to the US, because we got funded by 500 Startups in San Francisco. I spent six months in San Francisco establishing contacts with insurance companies, pitching to investors, meeting investors, it was a great learning how to sell your company in the US style, because this style is very different on how you sell your idea in Europe or in Estonia. Estonians are great engineers, but they are not well prepared to sell their ideas.
After San Francisco I came back to Estonia for a few months, then we raised another round of 400 thousand from one Austrian insurance company. Then we moved to Austria and built our team there, we spent there a few months, and then we moved to Zurich, because we raised quite a significant funding from venture fund of insurance company Helvetia. Helvetia operates all over Europe, but they have a head office in Switzerland. To get the cooperation going and speed it up, we had to be close to our large investor and client Helvetia.
Now we were for a few months in Estonia and are getting ready to move to Berlin, because we are building a sales team in Germany. Over three years we have spent a significant time to build up technology and now it’s time to sell our services and scale the business up. We are now putting together a team of five people in Berlin.
Regarding fundraising, yes, it is similar to a sales process like any other. You pick up a hundred potential investors or potential customers and eventually 1–3 % will invest or buy from you. It’s the same logic, for one investor you pick up like a hundred contacts. It’s definitely a full time job to raise funds. I really admire people who are able to work on product development fundraising at the same time, because I know what a great effort it is. If somebody says “I have not been able to fundraise”, I am always asking “how many contacts did you cover, what is your pipeline”, and if the answer is twenty — thirty, I know that this is not a real fundraising. This is something the founders have to acknowledge, it is part of the process and it is the same everywhere. It is the same in the US, the same in Europe. To pick up one — two investors, you should cover a hundred contacts.
Evita: How do you keep your determination and focus if you have to accept so many rejections? You mentioned 3–4 investors, which means that you have contacted over 300, 400. How to keep your confidence, when you receive so many rejections, which is a norm?
Meeri: First of all, you have to acknowledge that this is a process. You cannot expect that the first investor will say “hey, this is a great idea!” and will invest in your company. You have to acknowledge that this is how it goes that 99 will say “No” and one will say “Yes”. Then psychologically you are fine with that. When investors say “No”, you have to understand why. In some situations your pitch does not match their investment criteria, which is then absolutely fine. But in some cases you will learn that your product or focus is not right, and then you can start adjusting it and creating a better story. Sometimes you have a great product, but your story is not appealing enough. Investment is also an emotional process, investors should have an interest to be involved with you for the next 7–10 years. Over time, the more you speak, the more you understand what is the story investors want to hear, and you become better in creating value proposition for investors and for your customers, also you get more confident that your offering has a value and that you are doing a great thing.
Evita: In terms of technological platform and your innovation, maybe you can explain to our readers the unique proposition that INZMO has, since not everyone is familiar with your business model. I understand that this is a B2B2C technological platform which makes cooperation between insurers, partners and clients easier. Perhaps you can explain the technological aspect if it so that there is a clear meaning behind these statements?
Meeri: What we did not want to create was another fancy app or website to sell insurance, because there are plenty of such, but what we see where the problems really are, where they really start, it is from the insurance companies, because they are lagging so far behind from the technological side. Even if there are all those fancy webs and apps, the process of insuring is very slow, the claims handling is quite poor and also insurance is therefore quite expensive, because there are so much human resources involved in that.
What we created was a fully digital and a very comprehensive platform that provided services to insurance companies, to their claims handling parties, to their corporate partners, and also eventually to the end customer. This means that taking out insurance and selling it to the end consumer, and also managing all the claims and claims handling, thanks to this platform, we make much easier and much faster.
For example, the insurance companies do not have to have any technical capabilities to sell, for example, car insurance, insurance for electronics or households or any other over application or any other website. We just need to have input from insurance company what type of product they want to sell, what is the pricing formula, and we have already built up the whole digital solutions, that insurance companies area currently missing. We just need an input from insurance company and we can sell it to any customer via application, website, point of sale, whatever channel we chose. This is the main unique selling point of INZMO — it is end to end solution both for insurance companies and the customers, it covers all insurance process.
Evita: You received Europe’s best FinTech award from the European Commission. Congratulations on that! What was the criteria? Why was it awarded to INZMO?
Meeri: The main criteria was the aspect of innovation. This year I am in the jury, and there is a very big aspect of innovation, so I understand the criteria very well. What is important — what exactly is newly created from the technological perspective, is it really not available in the market, who benefits from that and if there is any competition and, of course, what is the business model.
Also this year we see great projects, but it is not clear on how they are going to make money. The times when it was sufficient to build a great database, attract many customers without knowing on how you are going to monetize this database and then hope to sell it to somebody, are going to be over pretty soon. The investors are more and more interested to know on how you are going to make money from the day one. Investors are not willing to accept the story that for the first five to ten years there will be period of investment and building a customer database, and then figure out how to make money.
From INZMO’s perspective it has been always very clear on how we make money from every policy sold or every transaction made on our platform. From every transaction we charge a certain amount of commission.
Evita: In terms of your personal education and development — I have read that you have paid a lot of attention on your education and personal development. You have legal education, also you have paid a lot of attention to psychology studies and reading. How about technology? Has it been a challenge for you to develop your technology knowledge?
Meeri: This is why me and my co-founder make such a good match. We are covering very different areas. I have a background from legal side, also I am interested in organizational psychology, how to build the right teams, how to have the right mindset in a company, I am more focused on communication and the relationships between ourselves and our employees, our partners, our investors. My co-founder Risto is a very technical person, he is managing all the products and all the processes from the IT side.
I consider myself very open minded in tech, I understand what we are doing, how we are building this. But to manage IT projects, I am definitely not the right person to be very deeply involved in that. But I have other skills for sales, communication, and for managing a company.
Evita: In terms of your personal motivation, I read in some of your interviews that you are interested in making money for charity. And you are already doing charity. Is that your life mission? Is that what drives you mainly or there are some other triggers, more classic entrepreneurial drivers?
Meeri: For me money is definitely not a dirty word. I like money, but I also think if somebody has an opportunity to make a lot of money (for example, if you are making more than 1 million EUR per year), then I think this money is not meant to serve only yourself or your own ego. If you are making this much money, you have to use it for more social purposes, you should help other people grow. If you are lucky or smart enough to get yourself to that level, then it’s a great sign that you can also help other peoples lives too. I do not see happiness in making lots of money and buying stuff, because it is very temporary, but if you contribute to other peoples’ lives too, it makes you much more happy than buying new cars or new houses. For me happiness is not in things, but in contributing.
Evita: How would you describe success and achievement in your professional life?
Meeri: For me success and achievement is when you have the sense of fulfillment, it’s very psychological, it’s like a feeling. Success for different people can be very different. For some people it’s money, if they make a certain amount of money or an exit or something like that, but for me it is to see when company is growing, that we can attract great people and great talents, we have great working environment, we are building something great, that we are creating value in our customers and partners everyday lives.
Evita: Are there any areas where you have or had to step outside your comfort zone, for example, going out to investors and asking for money or forcing yourself to learn advanced stuff about technology or anything else of that kind since you have become an entrepreneur?
Meeri: There have been a lot. Quite a lot of people who start their own business, they are financially not very secure. Neither were we. In the first years we were financially and personally struggling a lot, and it was quite painful for us. It is stretching yourself between your everyday financial struggles and those of your company and selling your company with enthusiasm to your customers and to your investors, hoping that you are not among 95 % who close the business during the first year. Mentally and also financially it has been a great struggle during the first years. Now it has become much better, when we are well funded and can enjoy the process more. It has been quite challenging, but neither of us, me or my co-founder, do regret it. It has been an extremely great experience. It has given us an opportunity to grow as persons so much that we are extremely grateful for this journey.
Evita: What has allowed you and your co-founder to remain among these five percent which did not close the first year? Moreover, you have been extremely successful in your journey. What have been the main reasons for that?
Meeri: I think it is about not giving up. It is not about how to do something, but your purpose, why you do something. If you have your purpose in your mind, if you are clear on what you want to achieve, the how will come. Also INZMO did not start as an insurance company, three years ago we started with international bicycle registry, where we also wanted to sell insurance, then we saw that it is a little bit too much of a niche project, we realized we need to make it bigger and we converted it into insurance technology business. Me and my co-founder did not have any background in insurance, but we were lucky we found people who had a great technical knowledge in insurance or they have been working in insurance companies in the past, we also gathered interest of other insurance companies where we got a lot of knowledge in, we learned on our way. At the same time we always had our goal in our mind, we knew what we wanted to achieve.
A lot of entrepreneurs quit because they lose their perspective, they forget why they are doing this. It does not matter how you get there. If you get there with bike insurance or selling socks, it does not matter, as long as you get there and fulfil your purpose.
Evita: With a mission of Riga TechGirls, would you recommend girls and women to join technology intense business?
Meeri: It does not matter men or women, they have to do what we like.
If you feel like doing business and it will be in field of technology, nothing should stop you. Some may think tech scene is very masculine and there is no room for girls there, but actually it has been the opposite. There are so few women in insurance technology that for me it has been easier to get an attention. If you are a woman and you are in a tech scene, there is a great chance that you will stand out and you will be heard, because it’s not a norm. Everybody is used that it is a very masculine environment.
For me it has been quite easy to go and speak on some stage. A woman in insurance technology is rare and everybody wants to see and hear you. You have to turn this into your favor. Investors and potential team members will want to hear what you have to say. If you are a smart lady, if you want to make business, if you have sparkle in your eyes, and you sell great what you are doing, they will be happy to talk to you and everybody will hear you, better than many men.
Other men in a startup scene have told me that I have such a big advantage as a woman to be heard and noticed among investors. No investor will tell me “go away, I do not want to listen to you, I do not have time”. No one. They will want to hear out what the ladies have to say.
Evita: What triggered to turn to entrepreneurship in the first place? You had a stable corporate career…
Meeri: I felt I could achieve more. I liked my job, I had fantastic customers, excellent experience with Ernst & Young, and actually I can always go back to consulting, but I felt I was capable of taking more risk and more responsibility, take a lead, create something new, that has not been created before, develop my own team, attract people, create new products, achieve something bigger…
Evita: This is very inspiring, Meeri! You have a great mission and a great story. Anything else you would like to convey?
Meeri: What I want to communicate is that on the way of starting your own business and becoming a successful entrepreneur, everybody struggles. There are no exceptions. It’s normal.
It might be easier if you are in the same community with other startup founders. Then you know that you are not the only one. Sometimes managing a company could feel very lonely.
All entrepreneurs are struggling at some point, it’s part of the process, it helps you to grow. People and women especially should not be afraid of that. Everybody goes through the same path.