Insurtech Startups disrupting Life Insurance

On 7 April 2016, Amy Radin profiled 8 Insurtech Startups disrupting Life Insurance. As 14 months is an eon in startup time, we revisited them to answer the “whatever happened to?” question. We also look at any new entrants since then.

First we look at funding as proxy for traction:

Funding for the Life Insurance startups profiled in April 2016

I am only looking at pure play Life Insurance startups. Lots of ventures have Life Insurance as one part of their offering. They are not our focus today.

Data is from Crunchbase and Google search. If you have any updates, please go to this thread on Fintech Genome.

Of course if you do an ICO and raise $150m in hours like Bancor, funding is no proxy for traction. People now talk of Minimum Viable White Paper (MVWP) in ICO land. But back in the traditional world of VC, funding is a reasonable proxy for traction – it is the wisdom of a small elite crowd.

This post gives you some background why Life Insurance is a hard market to crack.

So the only two from the batch of 8 that have raised a substantial sum fairly recently are Sureify and Ladder. It is a Darwinian world.

New Life Insurance startups since April 2016

Fabric is interesting. They have a clear value proposition on their home page – “plans start at $6 pm and covered in 2 minutes.”

Their fund raise is small – $2.5m – but it is recent (March 2017) and the investors are top tier.

Who have we missed? What do you know about this space? Are there any great ventures still below the radar funding wise? What are the best examples of incumbents innovating in Life Insurance? Please go to Fintech Genome to share your knowledge.

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Bernard Lunn is a Fintech deal-maker, investor and thought-leader.

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Hive ICO – the first crypto currency invoice financing platform for SMEs

@hiveproject_netOn Sunday evening I caught up with a friend who spends his time immersed in the crypto currency space. I’d bumped into him a few days earlier and said I’d shout him a drink or two if he’d be so kind as to devote an hour or so of his time to helping me get across the latest ICO craze sweeping the startup world.

And while I was lucky enough to get a master class in person, if you haven’t yet got your head around tokens and ICO, these articles are worth a read:

Bernard also wrote an excellent article on crypto back in May

Once you do understand what’s going on, it’s fun to start thinking of two sided network problems you could solve via a token model. My first modest attempt was to use an ICO to build a community of trusted financial advisors, who were remunerated for providing non-conflicted financial advice to consumers on the network who paid a monthly access fee.

To seed my community, the idea was to open my ICO to accredited financial planners. Let’s call this token $ADV (for Advice). Financial planners could buy $ADV in my initial ICO, and for every question successfully answered in the network, could generate a return on of 0.0000X% (or something similar) of the network’s monthly access fee, per $ADV held.

Questions that were answered well and stood the test of time could receive up votes from the community – another possible way for $ADV holders to generate income. And of course $ADV could be sold to a new financial planner – similar to how financial planners sell their practices and clients today. The value of $ADV would increase as the number of consumers using the network increased. Think Quora mashed up with Augur.

If you think about it, a modern day financial planner could build an entire client base and business using this model. In fact, it’s not hard to imagine that consumers in this network could start specifically asking certain planners to answer their questions, rather than throwing it out into the wild. The trick of course would be to make the network’s compensation model attractive enough compared to dealer groups – a source of conflicted advice and frustration for many consumers. And the cost and quality of advice received by consumers, would need to be better than going to a financial planner directly.

Small Business Invoice Financing ICO – Hive

Ideas aside, in terms of the small business space, I did come across the following ICO, which if you’re hungry for a slice of the ICO action, looks like there’s still time to get in on.

Hive claims it will be the first crypto currency invoice financing platform for SMEs, with its ICO opening in 4 days and closing at the end of July.

From what I can gather – and I’d say you’re best to verify this yourself – Hive tokens give holders the right to participate in the network and generate a return by funding invoices. The carrot for small business owners is the speed of execution of the financing element.

Decentralisation is certainly the flavour of the year, with ICO’s leading the charge. No doubt there will be some disasters, just as there are in the traditional venture capital and investment space. But the principles underpinning the concept certainly seem to have the legs to run the distance. And, I’m sure our new author on Monday’s, Ilias Louis Hatzis, will have plenty more to say about that on a weekly basis!

Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Jessica Ellerm is a thought leader specializing in Small Business.

Announcing Our New Author Ilias Louis Hatzis doing Blockchain Bitcoin & Crypto CXO Briefing on Monday

This has been quite a journey. I started Daily Fintech on 29 June 2014. In those days, I wrote every post. Just under 9 months later, that all changed when Efi Pylarinou started writing every week, an event memorialized here at the time (March 2015).

Then Jessica Ellerm joined to write on Wednesday about Small Business Finance and Arunkumar Krishnakumar joined to write on Friday about consumer banking & finance.

Today is another big day, because from today I will only be writing one post per week. That is the nearly 3-year journey from 5 posts per week to one post per week.  It took 3 years because I would never compromise on quality. Daily Fintech is about high signal to noise ratio and respecting the attention of our senior and influential subscribers (nearly 18,000 as I write, coming from 130 countries).

The high signal to noise ratio is most critical to the Monday slot when we do the Blockchain Bitcoin & Crypto (BBC) Weekly CXO Briefing. Read more about this Other BBC News here. This is a market that has a great number of specialist publications and that is also being covered occasionally in most mainstream publications. Our mission with the Other BBC News is not to preach to the saved who already read everything that comes out every day. Nor do we want to write the occasional post to introduce this complex subject to a mass audience. Both are hugely valuable, but not what we do. Our mission is serve the CXO level business leaders, entrepreneurs and investors who will use this technology to change the world. These are super smart people who want to be in the know and in the flow about Blockchain Bitcoin & Crypto – without getting stuck in the weeds.

Serving that super smart audience requires deep knowledge of the space, plus a learn-it-all attitude in a world that is changing so fast, plus an ability to communicate complexity without jargon, obfuscation or dumbing it down

That is why I was delighted to come across Ilias when we chose his post on regulation as our weekly Opinion to link to during Week 8. Then he agreed to write our post this week. From next Monday it will always be Ilias.

Ilias is the “other Greek who lives and breathes Bitcoin, Blockchain and Crypto”. I am referring of course to Andreas Antonopoulos as the more well-known Greek in this space. It is wonderful to now have two such talented Greeks on the Daily Fintech team, as Ilias will be joining our famed Femtech leader, Efi Pylarinou.

Ilias Louis Hatzis is an Internet entrepreneur that started his first company, an internet search engine, in the mid 90s during the dot-com era. Later on he founded several Consumer Internet and AdTech startups and went to work for Google and JWT. As well as still being an active entrepreneur, he mentors startups at the MassChallenge, MITEF and other startup accelerators and competitions.

Having lived and worked in America, Ilias is currently back in his native Greece. So he has the global perspective that our subscribers from 130 countries prize.

Start your week with Ilias and the Blockchain Bitcoin & Crypto Weekly CXO Briefing in your email by 7am CET. It should take you 5-10 minutes to read properly (and a minute or less to skim if it is one of those crazy Mondays).

You owe it to yourself to invest 5-10 minutes a week to learn about the technology that will change your company, your career and your world. Don’t get blindsided by important news. Be in the know and in the flow – without getting stuck in the weeds.

Each week we select 3 news items that matter. We keep it to 3 because we know that you are busy. If it is a big news week, it is our job to find the 3 news stories that matter so that you get a high signal to noise ratio.

For each news item we offer News Decrypted, which explains why investors, bankers and entrepreneurs should take notice. We include a Glossary if we have to mention some critical jargon.

Then we offer Our Take on the underlying trends represented by this news and “where the puck is headed”.

In addition to 3 news items, we select one analysis/opinion/insight piece each week on a controversial subject that we think is excellent.

Our point of view is that all three are important – Blockchain Bitcoin & Crypto. There can be private, permissioned Blockchains without any Bitcoin or any other Cryptocurrency. There can also be Cryptocurrencies other than Bitcoin (Altcoins) and distributed ledgers that use some form of Crypto other than Blockchain. We cover them all.

Please welcome Ilias who will be doing the difficult job each week of parsing the torrent of news and opinion to come up with important signal along all that exciting noise.

A great Fintech DogFooding story in SME equity fundraising: SparkUp

logo new

The future has arrived and the pipeline of ICOs is active. Keep in mind that this glove does not fit all.  Capital Markets are being re-shaped left and right. We are following the process as it evolves.

How to raise funding, especially for small businesses, remains “The challenge” for the entrepreneurs involved at all stages of their business development,

despite the multiple alternatives, like Alt loans from Kabagge or Sofi, equity crowdfunding from Angel List or Circle Up, equity financing from investment boutiques like FT Partners or Zelig Associates, or equity financing from Corporate VCs like Google Ventures or Citi Ventures, or traditional VCs like Accel Partners or Bessemer.

SparkUp’s value proposition is empowering small business owners to raise funding

whether it is at the early stage or even later when ready to tap into the public markets. It is also empowering investment managers that are looking to leverage their data.

Jeremy Ley is the French young co-founder and CEO of Sparkup, whose disruptive energy one cannot ignore. I spoke to Jeremy last week because SparkUp caught my attention, as they are

“Eating their own Dogfood”, which means they are fundraising using their own AI sales technology that taps into their own network to quickly and effectively do the fundraising.

SparkUp is not an investment bank. SparkUp is not a crowdfunding platform. SparkUp is a sales technology tool with a focus on financial securities.

It is in the same space as CustomerMatrix or Salesforce with their AI CRM system. However, these technologies have a broader scope and are used mostly to improve revenues and sales pipelines in businesses. SparkUp has a laser focus on the sale of financial securities for SMEs, which is a multi-billion dollar opportunity.

SparkUp can tap into your existing business network with their AI CRM and generate leads faster and more effectively. They received their pre-seed funding in 2015 (1.1M€). They are operational currently in France, the UK and Norway. They have contributed to 7 equity public offerings, signed 8 Investment Managers with 3 Bn+ in assets under management and facilitated the equity fundraising of 40+ SMEs.

The average size of equity financing for SMEs is currently around 150k€ and rising. The value that SparkUp brings to the SME market is obvious since it remains a hugely untapped opportunity. SparkUp has its own online diagnostic test that allows SMEs to very quickly (3min!) estimate their fundraising potential, a digital process that improves the efficiency of SparkUp in serving prospects (i.e. not wasting time on SMEs that are not worthy clients).

Publicly trading companies that could benefit from a boost in retail demand or companies IPOing, are the ones using SprakUp. SparkUp can “smartly activate their databases” which results in improved retail distribution in a cheaper way than ads on online brokers or other digital strategies. In addition, brokers can use the SparkUp sales technology on a revenue sharing basis, to leverage their databases and sales people.

Investment managers have been using SparkUp to cross-sell more of their products with the smart use of their databases.

SparkUp is already operating in France, the UK and Norway. They are currently looking to fundraise funds for the R&D development of their algorithms and their scaling up. SparkUp will accomplish this by tapping into its own network and through algorithms identifying contacts at the right level, emailing them, managing the project of fundraising with its own technology. They are an AI CRM that serves the specific purpose of raising funds and currently, demo-ing live its use. This is a great example that we have not seen neither in the crowdfunding space (i.e. still looking for a crowdfunding platform that has crowdfunded itself) nor in the Market place lending space (i.e. an MPL financing its growth by borrowing on its own platform).

Efi Pylarinou is a Fintech thought-leader, consultant and investor. 

Get fresh daily insights from an amazing team of Fintech thought leaders around the world. Ride the Fintech wave by reading us daily in your email.





Blockchain Bitcoin & Crypto Weekly CXO Briefing for week starting 12th June 2017

The Blockchain Bitcoin & Crypto Weekly CXO Briefing is all you need to know, each week, jargon free for CXO level business leaders and investors who will use this technology to change the world. Each week we select the 3 news items that matter and explain why and link to one expert opinion.

Editor’s Note: today is written by Ilias Louis Hatzis. Last week we met him as the author of the opinion post about Bitcoin Regulation. We liked it so much we asked him to be the guest editor of today’s news round up.

This is week 9. For the index and the intro, please go here.

News Item 1: Nvidia, AMD are for Ethereum Mining, Not Bitcoin, Says RBC

Decrypted: Mining for cryptocurrency involves using networks of computers to solve complex mathematical problems to verify transactions. The miner that solves math first and successfully verifies a transaction, is rewarded with new generated currency. Cryptocurrency miners use graphics cards from AMD and Nvidia to mine new coins. The rise in value for cryptocurrencies has boosted demand for faster chips from crypto miners. AMD’s shares surged by 9 percent on Tuesday and some of AMD’s processors sold out on and other retail websites.

Our take: This news is a sign how big the mining business is as it impacts the financial results of chipmakers. I am sure all the chip makers are really happy right now. The surge in crypto value is driving strong sales, and Nvidia and AMD are planning to release GPUs specifically designed for crypto mining with reduced specifications and costs. Also because of the supply shortages, the second hand market is thriving. Radeon graphics cards have become collector’s items with prices rising by 2-3x.

A few years back the same thing happened. This was only temporary as everyone was rushing to get into mining. Eventually the price went down and things got back to normal. There is a lot of price speculation going on right now. By the time most miners are set up, prices could easily drop as quickly as they rose.

It will be interesting to see the competition between mainstream chipmakers and Bitcoin mining specialist such a Bitfury and 21co.

News Item 2: Bank execs now bullish on public blockchains, survey finds

Decrypted: The survey results by Cognizant say that a lot of bankers now believe in public blockchain. It also says that they still believe in private blockchains. Translating the results, I think the survey show that financial institutions understand that public blockchain will get even stronger. Up till now, bankers have expressed confidence in private blockchains, or distributed ledger technology that does not even use a blockchain, but have not been confident of public blockchains such as Bitcoin and Ethereum.

Our take: The banker’s thinking has shifted, perhaps driven by fear that they might miss out. The technology for private blockchains has been around since 1978, when the RSA published the algorithm. So why has it been ignored for almost 4 decades? Because they didn’t have to do anything about it. Now they do.

I think Andreas Antonopoulos hit the nail on the head: “Bitcoin is a sewer rat. It’s missing a leg. Its snout was badly mangled in an accident in last year. It’s not allergic to anything. In fact, it’s probably got a couple of strains of bubonic plague on it which it treats like a common cold. You have a system that is antifragile and dynamic and robust.

There will be public blockchains, there will be private blockchains. Eventually the later will go the way of the dinosaurs. Time and time again, free and open has always beaten closed. The rat will survive.

Public blockchains such as Bitcoin and Ethereum are disruptive to banking as we know it today. There are also opportunities for banks to offer value to customers fpr the mainstream market that will compete with crypto specialst. This survey shows bankers adapting their thinking to this emerging reality.

News Item 3: New Hampshire Governor Signs Bitcoin MSB Exemption Into Law

Decrypted: Almost a year and half ago, New Hampshire passed regulation making it illegal to sell bitcoin without a traditional money transmission license. Now they’ve changed that decision and signed a new law that exempts digital currency traders from the state’s money transmission regulations.

Our take: As New Hampshire lifts regulations on the digital currency sector, other states are still moving in the opposite direction. One of the reasons for New Hampshire’s reversal has been the opposition from “free staters”. The Free State Project was launched in 2003, and today thousands of free staters live in the state and several have been elected to the legislature.

Unless you are deep into payments and regulation, you might see America as one market. It is one currency, one language and 50 markets/states and there is competition between states.

To say the least, the regulatory landscape in the US. for digital currency and blockchain technology is mixed. Some states are taking a stance, good or bad, and most are doing nothing, stuck in some grey area. Change needs to come from above, because managing 50 different regulations is a huge task for any company, especially a startup. Hopefully, initiatives like “Financial Innovation Now”, a joint effort by Amazon, Apple, Google, Intuit and PayPal, can help push Washington make the needed reforms and spur innovation at the federal level.

Opinion: Mark Cuban Asserts That Bitcoin is Not Currency

No question about it, Mark Cuban is a smart guy and his opinion matters. He can post a tweet and drive the price of bitcoin down. He may also know a thing or two about bubbles, having been a part of the dot-com bubble. I mean, one can certainly draw parallels between the rise of cryptocurrency valuations and that of Internet companies in the billions during the late nineties. Whether he’s right or wrong about Bitcoin going mainstream as global digital currency, the jury is still out on that one. Cryptocurrencies are not just assets, they are communication protocols for blockchain applications. You can’t separate bitcoin from blockchain. Demand for blockchain applications, will drive demand for Bitcoin and other tokens and in turn drive their value. As far as bitcoin endorsements go, I’d put more stock on things like what JPMorgan is doing to allow the bank to use a publicly available system for confidential transactions, or IBM’s integration of blockchain into its Bluemix hybrid cloud platform, or Microsoft using blockchain as part of Azure to target big banks. And, let’s not forget several other well-known investors, celebrities and personalities that are betting on bitcoin.

Tell us what you think. Do you agree with Mark Cuban that Bitcoin is not a currency? Go to this thread on the Fintech Genome to tell us what you think.

Bernard Lunn is a Fintech thought-leader and deal-maker.

Get fresh daily insights from an amazing team of Fintech thought leaders around the world. Ride the Fintech wave by reading us daily in your email.

Wrap of Week #22: Ether, ICOs, 0x, Numerai, Neos, Jude, US regulation

What a week again! Exciting topics, new names, and our insights.

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How Bitcoin will disrupt Wall Street West and East

We will be discussing how the Wealth Management business can profit from Fintech by gaining access to previously inaccessible assets and managers, at our first Round Table in Geneva on 28 June. The Bitcoin, Blockchain and Crypto revolution will be one of 7 subjects on the agenda.

Today we look at how Bitcoin will disrupt the current nexus of power between top tier Silicon Valley VC Funds and bulge bracket investment bankers in New York – what I call Wall Street West and East. This may lead to new opportunities to invest at the early stage with better risk adjusted returns than current models. Or it may lead to scams and bubbles and become a footnote in history. Or, like most disruptive innovation it might be scams and bubbles first and then change the world later.

Wall Street West is my name for the permanent aristocracy of top tier VC Funds on Sand Hill Road. Today they are far removed from their founding days as early stage investors. Today they are more like momentum investors who accumulate large % stakes in private companies before taking them to their connections in Wall Street East (i.e. the bulge bracket investment bankers in New York).

John Doerr of Kleiner Perkins Caufield & Byers famously called the personal computer industry’s growth from zero to $100 billion in 10 years “the greatest legal accumulation of wealth in history.” Then he saw how that the PC industry was a small wave compared to the Internet which went from zero to $400 billion in 5 years. “There are waves,” says Doerr, “and then there is a tsunami.”

It has been a great ride, but it is coming to an end.

The tsunami referred to by John Doerr is what we will in future call the Centralized Internet and recognize as a 20-30 year period in a multi-century history of the Internet. The next tsunami, powered by Bitcoin, Blockchain and Crypto will be the Decentralized Internet. This brings the Internet back to its founding days as a decentralized network. Bitcoin, Blockchain and Crypto technologies will enable the Decentralized Internet by creating a digital value exchange system.

The Decentralized Internet will also be funded in a decentralized way. This is what will disrupt Wall Street West and East. The value creation will be even bigger than the Centralized Internet, but these gains will be much more broadly distributed (good news for reducing inequality).

The Decentralized Internet will be powered more by the Rest than the West.

A big theme on Daily Fintech is “first the Rest then the West”.

For most of the 20th century, technology was limited to the West. Countries in the Rest (formerly known as developing, then emerging, then rapid growth economies) were “tech deserts” until those economies started to open up (first China, then India, then Africa). Then technology adoption started to flow from the West to the Rest; the last decade has been a boom time for Western tech firms selling to the Rest.

Now the flow is reversing as technology adoption starts in the Rest and then goes to the West. For example, look at Xiaomi to see the future of mobile phones and Alibaba for the future of e-commerce and Paytm for the future of mobile money.

Firms in America and Europe will profit from this shift, but will not drive the shift. This is the same as Britain making money investing in America (when America was an emerging market); British firms made money, but American firms drove the shift and took the lion’s share of the profits.

This megatrend is not limited to Fintech, but within Fintech mobile payments and mobile e-commerce is the big disruption and that is happening first in the Rest and then will flow to the West. Note that I am referring to technology adoptionWhere something is invented matters a lot less than where and how it is adopted, as Steve Jobs taught us after wandering around Xerox Parc and seeing the first graphical user interface and using that for the Mac. Network effects and branding have replaced patents as the technology moat.

The Centralized Internet was dominated by Silicon Valley companies. The top tier Silicon Valley VC Funds could network with the best ventures without using more than half a tank of gas in a Ferrari. This was fortunate because VC Funds have had trouble globalizing and many have given up the challenge.

This opens the market up to new innovation such as Initial Token Offerings (ITOs). These are currently at the bleeding edge stage, with lots of risk, scams and sketchy characters that are typical of the early days of a disruptive technology (think Silk Road and Mt. Gox). You can learn more about ITOs and attempts to create a self-regulatory code of conduct on this discussion on the Fintech Genome.

This is still very early days, but the key point about Initial Token Offerings is that they are a) permissionless and b) global. Anybody can invest from anywhere. This is the power of a global network that the top tier VC Funds catalyzed with their investment in Centralized Internet players. Now the genie is out of the bottle and those same top tier VC Funds have to compete on a level playing field with anybody who has capital and insight.

Watch out when this tsunami crashes on the shore

Bull markets end in a frenzy. The bull market in Centralized Internet ventures is currently in a frenzy. People look for historical analogies to the Dot Com era, but as the old saying goes “history does not repeat but it does sometimes rhyme”. Most of the frenzy/overvaluation this time around is in private not public markets. For more data on this, see this post.

This led to a strange inversion of the norm during 2015 and 2016 when private companies were valued higher (on paper at least) than public companies.

Thanks to artificially low interest rates for a long, long time, even public stocks are overvalued on historical norms. So the ending of the Centralized Internet will be brutal. From this rubble will emerge the new Decentralized Internet.


For many reasons, the IPO bar keeps getting higher. So ventures need much longer and much more capital before getting to liquidity. This is good for really big funds in the short term, but will end badly when the public/private inversion ends. ITOs in contrast offer liquidity from day one.

Don’t need $ billions for data centers

The key point about the Decentralized Internet is that you do NOT need $ billions for data centers, because the network is powered by the computers of the users in the network.

This ends one of the wonderfully simple ways that top tier VC Funds made money. They tracked ventures until they saw signs that hyper-growth was about to start, knowing that large amounts of capital for data centers (and other things) was needed to fund that hyper-growth.

Some centralization, but permissionless

Bitcoin today has a scalability problem. For more, read this post. To put that in perspective, pundits for decades have talked about the Internet’s scalability problems (and yet it has scaled very well).

To scale Bitcoin, it is likely that some form of offchain processing is needed; about 80% of Bitcoin transactions today are offchain. The cyber purist view that every human will run a full node that records every transaction is clearly not technically feasible at scale.

It is likely that this will happen in future through something like Lightning Network.

This is not the post to explain how Lightning Network works. Here are a couple of good introductions:

The assumption about offchain processing is that it has to be centralized. Offchain processors today such as Coinbase and Bitpay are centralized.

That assumption is false. As we have seen from services such as Skype, large scale services can be decentralized. However, there is something more important than centralized vs decentralized which is permissioned vs permissionless. Skype is decentralized but it is controlled by Microsoft. The idea behind Lightning Network is that anybody can choose to run a full node or a Lightning Network node. Permissionless adds economic incentive and makes it scalable.

A global Wall Street, spanning both early and late stage that is truly decentralised and permissionless will change the game.

Join us in Geneva on 28 June

One of the subjects for our Round Table in Geneva on 28 June will be:

Bitcoin Disruption and the possibility that permission-less innovation and decentralization will change the game.

Note; this is one of 7 subjects on the agenda.

If you are interested in attending this Round Table, please email julia at daily fintech dot com and we will send you the full agenda and other details. Please note that this Round Table is invite only for Family Offices, Private Banks and Asset Managers.