Inventing HomeCare: Our Investment in Luko
Every year in Europe €50bn is lost in home damages from break-ins, fires and water leaks alone! We are about to enter 2020 and we still haven’t solved home protection and care. Best alternative in the market is a 60-page-long insurance contract that covers for damages after the fact … of course, only if you persuade your Insurance provider that your claim is legitimate.
Can you imagine?!
And people really crave for such protection; the home insurance market in Europe was at €100bn in 2018. This figure becomes €300bn if we include real-estate more broadly.
On the positive side, smart home bundles are making “home health” measurable, opening up opportunities to parametrize outcomes and improve coverage. But have you looked at the figures on European adoption of smart home kits? They are currently at single digit %, adopted by the affluent and the geeks. It makes sense, since a typical off-the-shelf kit costs an average of c.€200 + SaaS, with no immediate utility beyond the gimmicks.
What if instead of focusing all of their energy on a transactional sale of a complex financial contract, there was someone that focused on detection of accidents and holistic HomeCare?
Enter Luko, an online direct-to-consumer insurance MGA that offers a home protection subscription, with 2’ policy underwriting utilizing satellite data, mobile-based claims and a repairman network at your door. Reimbursing within 2hrs of claim (also via Lydia) or by sending a vetted repairman to you — the way claims should be.
While other innovators are focused on offering traditional insurance cover through digital means, Luko is focused on creating a fundamentally new product category that goes beyond coverage. Moving insurance from a post-incident, claims-based model, to avoiding home accidents to begin with; building the protection layer of the connected home and giving a great reason for mass market adoption. In doing so, they will deliver door, electrical and water sensors, used to detect home damages early and over time prevent them altogether; the “holy grail” of insurance.
Behind all this sits a diverse, energetic and united team led by repeat founders Raphaël Vullierme (CEO) and Benoit Bourdel (CTO) that complement each other perfectly and who have attracted exceptional talent with previous roles at AirBnB, AXA, Doctolib, Econom, Facebook and Auxivia, among other. A long-term oriented, passionate team that have already created strong foundations for continuous growth.
It is precisely this mission-driven team with a sustainable embedded model that caught our attention late last year and which we were privileged to back earlier this year. In fact, the societal drive of the Luko team is a fundamental building block of the company;
- Luko donates any money left unclaimed to charities chosen by its customers;
- they are a Certified B-Corp as of June this year; and
- all shareholders have agreed to sign Luko’s social and environmental impact mission, to accept that Luko won’t trade its mission and impact for growth.
Since launch, Luko is delighting its customers, already shifting the dynamics of the industry;
- a Net Promoter Score that is 5x the industry average; and
- no churn post claims, compared to a 40% of the industry.
All that while growing at a phenomenal rate, through differentiated channels with favourable unit economics, very interesting customer cohorts and market competitive insurance fundamentals (e.g. loss ratio). Luko attracted more than 10,000 active subscribers in its first 10 months of operation, having seen strong organic growth from happy customers.
This is just the beginning.
Having established strong foundations of trust with world-class Reinsurers, Luko has a high degree of autonomy that allows them to engage in radical innovation without having to sacrifice agility. Their tech-first and network effects approach are a strong differentiator today. The team has just scratched the surface and I can’t wait to see how they evolve!
With all that in mind, we at Speedinvest are very exited to continue to support Raphael, Benoit and the entire Luko team and welcome our friends at Accel and Founders Fund to bring Luko one step closer to guaranteeing sustainable peace of mind in European homes — onwards! 🚀
If you haven’t already, get your insurance quote now!
