By Philippe Gire & Louisa Mesnard
As Ornikar announces a new round of funding, we figured it was the right time to look back on how they mastered the art of disruption these past 7 years and to share some insights about their astonishing execution.
Let’s start by defining the “art of disruption”. According to Cambridge Dictionary, disruption is “the action of completely changing the traditional way that an industry or market operates by using new methods or technology”. It consists of imagining an innovation, confronting it with reality and overcoming all the obstacles it is bound to raise and finally finding a product-market fit. It is an art in the sense that there is no proven method to achieve it, it cannot be learned from textbooks, but it is the initial dispositions of the “artist” and the determined practice of his/her art that allows it to emerge. Let us see how Benjamin Gaignault and Flavien Le Rendu have practiced this art of disruption at Ornikar.
I — 2014–2016 The bumpy road & the art of disruption
The Ornikar-Elaia relationship started off in summer 2014 when we first met the management team and led their first cheque a couple of months later. The company had just been created and the founders were strong believers in their ambition. They convinced us to follow it: disrupting the driving school profession by offering a cheaper, uncomplicated and faster offer. Their addressable market was the kind we love: huge with recurring demand! France alone had 1.3 million candidates which represents a 1.8 billion euro market, but it was also a very fragmented market with 12 000 driving schools and 20 000 teachers.
Neither the founders nor their first investors (us) had anticipated the difficulties and hurdles that Ornikar would have to overcome. Competing with traditional driving schools in France with an online marketplace of students and teachers also meant that they would face regulatory challenges (spoiler alert: which they did).
Back in August 2014, the New York Times wrote an article, “A driving school in France hits a wall of regulations” in which Benjamin Gaignault, the CEO shares: “It seems like the idea is to wait us out until we run out of money. There is an effort to just destroy us.”
These two years without their operator’s license were tough. They fought many lobbying and legal battles as well as testing partial and/or alternative models that were more or less successful. The good news with such a long and painful period of disruption was to give the founders a fantastic opportunity to practice, at length, the “art of disruption” and it gave them the opportunity to understand its dynamics. We were impressed by the resilience we witnessed.
Many entrepreneurs, who either take this first step too quickly or give up along the way, don’t have the resilience to pursue their initial idea with such perseverance and therefore do not benefit from such a long period to “master” the art of disruption. (Note, however, that this is still very reasonable compared to the many famous artists who have only been recognized posthumously!)
III — 2016–2020 Expansion: Disruption rather than execution
After years of hope, on March 31st, 2016, we popped the champagne as Ornikar finally got the agreement and could start operating. This was the beginning of the driving school marketplace we know today.
2016 to 2020 were all about the growing momentum and the strong expansion. Ornikar became profitable in 2018 and at the same time announced a new fundraise of 10M€. In 2019, Ornikar was a network of 700 state-qualified teachers (vs. 1600 today) and managed 70,000 hours of driving lessons a month via its marketplace.
Many entrepreneurs, when they succeed in their first disruption, do not necessarily get the opportunity to practice this art again, at least in the same startup. Benjamin and Flavien had this opportunity twice and, as first investors, we were delighted to witness them succeed again thanks to their initial long period of training!
According to the similarity of the geographical markets, internationalizing a successful disruption in a first market is often more of an execution than a new disruption; but not for Ornikar. The driver’s license situation is so different from one country to another (especially in terms of price optimization opportunities and local regulations) that entering a new country is more about disruption again than execution. It is necessary to choose the target countries with great care according to their specific situation, and in particular their readiness to disrupt and to commit with the same strength as the team in France. It’s vital to adapt the proposal to the local market and to shake up the established habits and rules.
Thanks to the experience acquired in the art of disruption in France, the team was able to cross it throughout Europe and the results obtained now allow it to forecast the same successful results in their first foreign country: Spain this year as those obtained in 2017 in France.
III — 2020 A new product, a new disruption
A third disruptive opportunity arose in the insurance market, which Ornikar initially considered only very partially, as a complement to its driving instruction offering to increase average revenue per customer. But as the team explored this market (€17 billion in France), it became clear that its digitalization offered tremendous disruptive potential, far greater than Ornikar’s initial market of young drivers. So the team once again practiced its art and came up with a first product, Ornikar Assurance, its fit was proven far beyond the new drivers from Ornikar since only 20% of the first customers were from this origin.
As investors, this hat trick moment is often only dreamed of. To be able to see Ornikar diversify and extend past their original market and throughout their newly acquired markets with new offers was extremely fulfilling and a milestone we would dream to see for all our portfolio startups.
And more to come! On a mission to become a global leader in road safety
The transformation of these three identified and proven disruptions is now a matter of execution. This execution has already been successful in France, where Ornikar is now the undisputed leader in driving schools as it prepares over 35% of drivers for the French Code de la Route driving tests.
This first execution experience has proven the talent of the founders in this field: they have been able to progressively optimize their product, develop the most efficient processes and surround themselves with recognized specialists in various fields. They have helped over 1.5 million people learn the rules of the road.
Execution is more of a talent than an art and the best way to challenge such a talent is to go through difficult times. This happened with Covid which strongly hit driving schools as they were closed during the first lockdown. The Ornikar team reacted admirably by reconfiguring itself within only a few days to preserve the short term and by taking advantage of the following months to prepare for the restart and emerge stronger from the crisis. Beyond their sole activity, they protected their entire ecosystem by setting up a support fund for their network of self employed teachers. At the end of the crisis, their figures validate their talent of execution and their ability to replicate this success abroad in the insurance industry and this is what convinced the investors of their Series C of €100M (led by KKR).
Kudos to the amazing team making Ornikar a jewel of our portfolio and congrats to all that has been achieved these past 7 years. We are super proud to have led your first cheque and look forward to both the disruptions that awaits and your perfect execution!