Not sure if you obsessively read the same market news as I do but it looks pretty inevitable there’s an economic downturn ahead. Whist the root cause is complex and has very little to do with this man, I’d still like to blame him:
Amazing, I know.
Right, back to topic.
Whilst the term ‘recession’ fills most with dread, it properly excites me.
Where there’s crisis, there’s also an inflection point where the world after is unlikely to resemble the one before it.
My interest in this lies purely in the strategy required for survival and, if possible, growth.
And there are two schools of thought:
Double down on innovation – it’s a critical lever for companies to achieve their long-term objectives
Pull back on innovation – it’s a frivolous tactic in good times, wasteful in bad times
Over my lifetime we’ve had the 1980 crisis, the 1990 slowdown and the 2000 bust. Whilst there hasn’t been too much research into innovation during recession, one paper I’d recommend is ‘Roaring Out of Recession’ by Harvard Business Review.
It’s a study of nearly five thousand public companies, analysing strategic selection and performance data preceding, during and after the recessions.
As you’d expect a bunch of the companies didn’t survive (17%) and only a small number ‘flourished’ (9%).
Those that doubled down didn’t flourish.
Those that cut hard, didn’t either.
The ones that did succeed were those which concentrated on short-term operational efficiency, and in parallel, invested heavily in the future (spending on marketing, R&D and new assets).
Happy to share more on this, how much of your budgets you should be allocating to innovation, how that should split between today vs. future etc. Just drop me a line.
Plus the good news is yesterday we were working on our North Star Metric for Sønr:
If you haven’t had a demo of Sønr, it might well be the right time to schedule one.
Time for some market news.
Tonnes of stuff again but I’m intentionally keeping this one short. In part because our clients are all now receiving a beautifully curated personalised selection and I don’t want to dilute what they have been sent. And also because it takes me a freaking age to pull this stuff together and I’ve a stack of meetings around my writing.
Brazillions being poured into LatAm
Let’s kick off with a quick 2019 funding round-up: fintech investment into Latin America has now overtaken India, which in turn topped China for the first time. Super interesting.
In part this was skewed by the recent $400m poured into NuBank, Brazil’s digital challenger bank, but I’m not letting that stop me from packing the swim shorts and inflatable unicorn and booking my plane ticket to Rio. It’s important for me to stay close to this stuff, right?
Keeping with emerging markets and a partnership that stood out is between microinsurer BIMA and the Cambodian cashless payment platform Pi Pay.
For a massively uninsured population, there’s something really attractive about being able to pay $2 per month (now through Pi Pay’s app) and be covered for up to $5,000 personal accident and $2,000 for life.
Round the coast (and over a 55km bridge) and you’ve got Hong Kong-based CompareAsiaGroup, one of Asia’s leading financial management platforms for banking and insurance products and services.
Last week it raised a $20m Series B investment enabling it to open a range of new Open Banking services. These will be rolled out to its other active markets including Singapore, Taiwan and Thailand.
One to keep a close eye on to see what innovation we can import back to our own markets.
The final bit of Asian market news is that Munich Re has appointed a CEO of Greater China, Steven Chang. Why’s this news? Two things. Firstly it's the first international reinsurer to establish a branch out there. Secondly, part of the reason its making this move is to tap into the local innovation and export that to their global client base.
Sounds eminently sensible; it was one of the key drivers behind the trip we took BGL Group on earlier this year which we’ll be repeating this October. If you’re not yet signed up, get yourself along. We’re taking a mixed group, so all are welcome.
Allianz, Allianz, Allianz Allianz Partners Deutschland have launched Pay & Protect. It’s well executed for what is a pretty complex point-of-transaction insurance play albeit the true test will be whether it can innovate beyond what’s already out there.
Start off by investing 5% of your property's value. Unmortgage, through a mix of funding partners, will invest the 95%. Rather than own the place, you get 5% off the rent [based on local rental places]. If you can, you keep adding to the pot, ultimately buying out the funding-partners with a mortgage.
And the third bit of Allianz news is its partnership with the startup crop insurer OKO, designing products to automatically compensate farmers in Africa when they are facing adverse weather.
Hats off Allianz, it’s been a busy couple of weeks.
But my dog doesn’t speak Swedish
London-based Bought By Many has partnered with Stockholm’s digital vet service FirstVet to offer pet insurance customers access to free video consultations. Again, a few players doing this but I like Bought By Many so this gets my vote.
Another bit of local news is off the back of Trōv’s recent repositioning – ‘the preferred international partner for insurers and financial services enterprises seeking to go to market with innovative insurance products and capture a new generation of consumers’ – is a tie up with one of our big banks, Lloyds Banking Group.
Its press release mentions ‘an innovative insurance product designed around the evolving lifestyle of modern, connected UK consumers’. Let’s hope it’s not on-demand gadget insurance. Watch this space.
And for those who think the UK consists of London, Oxford and Cambridge, here’s some news to fuel that. Wayve Technologies, the Cambridge startup developing driverless car tech is on track to raise $20m. Its ambition? To build self-driving cars with ‘better brains’ than those being designed by Google or Uber.
But above and beyond all of this, my far my favourite read this week has been ScaleAI.
Not because of its tech (it's built a mix of tools and outsourced manpower to deliver seriously high-quality training and validation data for AI applications), or because their 3-year old company is one of the latest unicorns, but because its founder is 22 YEARS OLD.
And the best bit is this quote from Mike Volpi of Index Ventures: “When we signed the term sheet and went out to dinner, I ordered a nice bottle of wine to celebrate, and then had to ask him if I’m breaking the law.”
Right, time for one last call and then I’m done.
Don’t forget to schedule a demo of Sønr. We’re building some seriously exciting stuff at the moment and happy to show it off.
Have good weekends all.
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