November 30, 2021

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Insurtech: Leocare raises 98 million to try his luck in Spain



And two fundraisers. After completing a round of funding of 20 million euros (including 5 million in debt), Leocare provides the cover with a financing transaction of 98 million euros. The French neoinsurance did not wish, this time, to share the distribution between equity and debt. According to our information, the start-up would have raised between 60 and 75 million euros in equity. Its historical investors (Felix Capital, Ventech and Daphni) are back to the pot alongside Eight Roads (fund backed by Fidelity) and the discreet British fund Hedosophia. The valuation is not communicated.

Like many start-ups, Leocare has benefited from the accelerated digitization of the economy since the start of the pandemic. It projects to reach 60,000 customers by the end of 2021, against 20,000 at the start of the year. “The breakdown of our portfolio is similar to that of the French market: 75% auto contracts, 20% home and the rest in smartphones and others,” says Christophe Dandois, co-founder and CEO of Leocare.

Its competitor Lovys is targeting 100,000 customers by the end of 2021 while Luko, specialized in housing, has just passed the 200,000 customer mark.

Towards more personalization

Almost 50% of Leocare’s customers come from marketing (advertising on Google and Facebook, SEO, affinity networks, etc.) and between 20 and 23% from partners. This growth is driven by the expansion of its range, which now includes four products: cars, homes, motorcycles and smartphones. In 2022, the start-up will offer insurance combining car, motorcycle and new mobility.

The pandemic has also validated its model based on the flexibility of contracts. “Being able to lower car guarantees during the Covid has been very beneficial. Some customers have earned between 15 and 20% on their premium, ”emphasizes Christophe Dandois. Leocare offers more and more recommendation and prevention tools. For example, it has just launched a bot that alerts its customers when they enter risk areas.

Move away from broker status

This financing operation will allow Leocare to launch in Spain in the summer of 2022. A team of five people (out of the 90 in the company) is already in Madrid. Neoinsurance is not the first to take root in our Iberian neighbor. Luko attacked the Spanish market last May, joined by Lovys in the summer.

The Spanish market is one of the largest in Europe, but above all it is poorly endowed with 100% online insurance, unlike the United Kingdom and Germany which already have well-funded players such as Getsafe (auto insurance). .

With such a large envelope, Leocare could apply for an insurer’s license. Currently, it is a broker, like the majority of insurtech. This means that the risk is carried by an insurer or reinsurer. But to the question “are you going to ask for an insurer’s license”, the start-up is rather vague. His boss indicates that he is moving towards “a mix model in which we will bear part of the risk on certain programs. “

Understand: have an approval for one or more products, which allows you to achieve more margins. Lovys and Leocare, for their part, have not initiated a procedure for an application for authorization. Only Acheel got this Grail for its launch in May 2021.

On the income side, Leocare is targeting a turnover of 100 million euros in 2022. In 2020, neoinsurance has “only” recorded 1.36 million euros in income.