“8 Questions with Playfair” ft. Niels Thone @ Sprout.ai
This is the thirteenth in our “8 Questions” series — in which we sit down with founders in the Playfair portfolio who share their entrepreneurial journey.
We first invested in Sprout.ai, AI powered claims automation for insurers, in 2018. Since then, the company has experienced rapid growth, winning big name global insurers as clients, and closing an $11m Series A led by Octopus Ventures. They also took desk space in Warner Yard so we get to say hi 👋
Today, we sit down with founder and Chief Growth Officer, Niels Thone, to hear his story from the beginnings of Sprout.ai. We hope this can help other founders and aspirational entrepreneurs in their own ventures.
1. What inspired you to be an entrepreneur?
I was into business and entrepreneurship before I knew what the term actually meant. I have always loved creating, adding value and building stuff that helps people and solves their problems.
I also think it’s in my genes: my father is also an entrepreneur who built and grew a social enterprise from scratch to 300 people. When I was a kid growing up in a small village in Belgium, I would take the eggs our geese lay and sell them to our neighbours. I knew that these were more valuable and rare than chicken eggs, so I took the geese ones.
A bit later on, when I was 19 I went to Vietnam and noticed that there were no official car dealerships there, and especially none that sold luxury cars. I saw a gap in the market and an opportunity for myself. When I came back home I spoke to my uncle who had a car dealership in Belgium and together we would scout second hand luxury cars in dealerships around Belgium, France and Germany. We would then ship them to Vietnam from the port of Antwerp. I did it for a few years while I was at university and the company we set up in Vietnam, CX Oto, later became the first official Rolls Royce car dealership in Vietnam.
2. Can you take us back to the beginnings of Sprout.ai?
It was a mix of personal experience and opportunism. The initial idea for Sprout.ai came to me following a motorcycle accident. I had a terrible experience with my insurer when it came to make a claim and the process was long and protracted. It hit me that the claims process in insurance companies is still extremely tedious and long, and I knew there was a way to solve this with technology.
Ultimately, what I realised is when you’re claiming on insurance, you feel emotionally and financially vulnerable. Therefore it’s vital to have a response and decision on the claim quickly in order to move forward.
We took a rational approach to our initial idea: my co founders and I went through data around VC investment trends that was made available to us by Imperial College. By speaking to many different people working in the insurance industry, we realised that this was a unanimous problem to all companies in the sector. Our research showed us that if we created a solution like Sprout.ai, there would be a high chance that people would want to buy our product.
3. What is the hardest lesson learned since day 1?
The hardest lesson I learned was that it’s ok to say ‘no’ at times to very appealing contracts and insurance giants, when the timeframes or deliverables were not realistic. You have to resource projects for success from the get go. On other occasions, the scope of work was outside our wheelhouse or product roadmap — meaning we would have to develop a new solution, which would be resource heavy. I’ve learned it’s important to remember what you’re good at, and stick to it!
4. What has been your strangest day as a founder?
The TechStars program we were a part of in the early days of Sprout.ai was an action-packed and busy one, so the day right after my wedding I found myself on a plane to New York for the final pitch — an event where I was presenting on stage for hundreds of people and investors (and I was pretty nervous). That was quite a weird feeling!
5. What have you learned from your investors since you first fundraised?
From all my investors, including Playfair Capital, I have learned about the importance of having the right metrics, and how to measure and communicate them successfully. Information such as production coefficient, cost of acquisition, margins, etc. can be hard to understand if they are not presented properly.
6. As a founder, what is your proudest achievement to date?
Since I founded Sprout.ai with Raphael Guth in 2018,we have already onboarded three of the ten largest insurance companies globally — all of which are also Fortune500 companies. For a small startup like Sprout.ai, being chosen as a partner by such large organisations is a huge milestone. It proves that the automation solution we created is addressing a major problem insurers face on a daily basis, but it is also going to shape the future of the industry in the near future.
7. Crystal Ball: What are your plans for the future?
We want to scale Sprout.ai and become a Unicorn with a valuation of over £1 billion in the next five years and reach 100 million people.
Sprout.ai already operates across Europe, LATAM and APAC and our intention is to keep scaling. Partnering with major global insurers allows us to reach and help more people throughout the claims process as these companies have the greatest market share.
8. #1 piece of advice to an aspirational founder?
Don’t be a founder unless there is nothing else you can think of doing. Don’t get me wrong, the world needs more founders with great ideas but growing a business requires a lot of resilience and perseverance. It is very much not a game or a get-rich-quick scheme.
It requires a lot of sacrifices and hard work and very often in return for nothing, given the rates of success among young startups. Success is a choice that doesn’t come for free. Starting a business comes with making a lot of sacrifices in your personal life, which is something that I was very naïve about when I started my journey with Sprout.ai.
However, in my case, I knew that nothing would make me feel as satisfied and fulfilled as growing Sprout.ai, so I wouldn’t change it for the world!