[Inside] Why did we invest in Zelros?
Zelros just announced its first round of fundraising. At astorya.vc, we are glad to join the €4m investment round along with Hi inov and 42CAP, willing to support Zelros in their product development and international expansion.
Perfect fit with astorya.vc investment thesis
Florian and I were observing Zelros independently since months. The startup is based in Paris (#Europe), has built a product, which is now ready to scale (#early-stage) and the product addresses some of the biggest pain-points of insurance employees — simple access to information (#insurance). Zelros equips insurance employees with simple access to data and AI algorithms which increases their performance in day-to-day sales and claim management jobs, accelerating responsiveness to customers.
The startup fells directly into astorya.vc investment thesis: early-stage, insurance, Europe and it was so visible, e.g. hosted at Parisian startup incubator Station F, as a part of prestigious Microsoft AI Factory, that we obviously couldn’t ignore it. But it’s not the visibility, what makes a startup worth investing.
1) A strong tech team to build a proprietary technology
Christophe, Fabien and Damien constitute a great team of founders. Two out of three have tech background (data & software development), keeping an eye on product development, but with a very strong commercial focus, brought by the third founder, they are carefully listening to the market.
On top of the founders, 12 out of 17 teammates are tech talents and it seems as Zelros found a secret sauce to attract them. One of the ways to enlarge their recruitment pool was by co-organizing the contest for Le Meilleur Data Scientist de France, which promoted Zelros among more than 400 top qualified data scientists in France.
2) A product, which fits the market
One of the key mistakes derailing young startups is a mismatch between what market needs and what the product offers — the product-market fit. Making sure it won’t happen contains of three elements: a well-defined problem, a solution created along with the end customers and a market to buy this solution at scale. None lacks in the case of Zelros.
Insurance employees (claim managers, sales agents, risk underwriters) take everyday decisions based on data about the insured. Yet, insurance companies usually work on numerous old, disconnected IT systems and databases (CRM, policy admin, risk, etc.), and limit access only to the necessary employees. The majority of employees either lack access to these dataset or need to manually log in to many systems to collect pieces of detached information. It’s a nightmare. Zelros founders, long-time insurance employees, had a perfect understanding of the issue.
Thanks to technology (NLP, AutoML, SHAP, etc.) Zelros allows insurers to access customer’s data scattered in many silos through a simple messenger (or a plug-in to any corporate messenger). By asking questions to the company’s datasets insurers are receiving AI-driven customer insights or sales hints. Thanks to the AI algorithms, in some cases, the answers come even before the question is asked.
The technology had numerous use cases. But based on the feedback from the first customers: CNP Assurances, Natixis Assurances, MAIF, etc. Zelros created two products out of the use cases delivering the most astonishing ROI: 1. sales advisor and 2. claims facilitator.
In a nutshell:
- sales advisor: the algorithm understands customers needs and recommends suitable products, suggesting the most convincing arguments; it also helps detect churn risk and simplify up sell/cross sell
- claim facilitator: the algorithm ranks claims by the level of complexity, computing fraud or eligibility scores and anticipating resolution type
Beyond the two existing use cases, AI dramatically revamps insurance industry in other ways: prospecting and churn score, pricing and risk assessment, claim and fraud detection, etc. But, is there a better product-market fit than numerous customers paying for the solution because the RoI is worth its price?
Nota bene: This market segment requires high level of technology acumen, therefore harder to attract, tech talents. According to astorya.vc sourcing technology, only 15% of 2700+ startups are focusing on claim management
Nota bene: Insurtechs and incumbents are expected to revamped their customer experience (e.g. Lemonade fastest claim was paid in 3 seconds). According to an Accenture study, 75% of insurers plan to apply AI to automate part of their processes in the next 3 years
3) astorya.vc capacity to invest more than money
At astorya.vc, besides money, we bring to the table an extended network of european insurance and tech experts — an easy access to deep expertise and potential commercial leads (starting even with our own institutional LPs).
That’s why Zelros decided to have astorya.vc to the cap table alongside Hi inov and 42 Cap. The first, a French VC fund specializing in B2B startups, a great partner to structure and scale up of the young b2b company. The latter, a German VC founded by two successful tech entrepreneurs, specialized in data-driven startups, will not only help in scaling up, but also act as a guide to the German market.
Opportunities & work on the horizon!
Beyond improving incumbents’ processes, Zelros transforms how insurers takes decisions: from stonegraved business rules to AI-driven recommendations. We consider Zelros a key player to deliver the vision of an AI-powered insurance industry and feel very excited about backing the team!
>> Book a live demo of Zelros directly on their website: http://www.zelros.com
Leveraging its own sourcing technology astorya.vc identifies promising startups, structures their growth through its extended network of mentors, and develops new business opportunities with its insurance investors.
Raised from insurance players, astorya.vc is the first early-stage investor in Europe, focused only on the insurance industry.
Learn more on http://www.astorya.vc