As a foreigner, navigating health insurance systems can often be difficult. German startup Feather believes it has a solution and has raised €6 million to help some of the more than 40 million expats working and living in Europe.
It is not that there are no options for foreign nationals to insure themselves. There are many. But precisely because the offering is fragmented and difficult to match individual needs, Feather believes it can carve out a space for itself despite stiff competition from incumbents.
As expats often have access to their host country’s public health system, a big part of the question is where they fall, especially during the transition periods that are increasingly common with the rise of telecommuting.
That’s the level of detail the startup wants to achieve, Feather CEO Rob Schumacher told TechCrunch. For example, it provides a recommendation tool to help people understand what kind of coverage they might need, starting with health insurance, but also additional options such as life, pet, auto and personal liability insurance.
“The funny thing is that everyone who is an expat gets it right away,” Schumacher said. This helped Feather get angel checks from former founders who gained knowledge through their startups, such as GoCardless, Monzo and N26, where Feather CTO Vincent Audoire was an early employee.
Wise co-founder Taavet Hinrikus also invested in Feather through the VC fund he co-founded, called Plural. Feather’s lead investor, Keen Venture Partners, even came in: It was partner Abdul Afridi, an expat, who approached the startup, not the other way around, Schumacher said.
But raising money has been anything but painless for tech startups going public after 2021, and Schumacher is wary of making the process sound easier than it is.
With French neo-insurer Luko undone in the background, and other very public problems in insurance tech, getting through due diligence was no easy feat. As the discussions continue, Feather’s founders have considered simply returning to the pursuit of profitability. “And I think that was the key element that made us really interesting again,” Schumacher said.
International expansion
Feather continued because the new backers brought expertise on a wide range of issues, including branding, but mostly because the capital would help fuel its internal expansion. The startup currently serves expats in Germany, France and Spain, with three more countries slated to launch by the end of 2024.
He wouldn’t have done that without additional funding, Schumacher said. “We would just do more incremental things.” That would probably be a missed opportunity: The startup says it achieved more in the six months after launching in Spain than in its first 18 months in Germany.
Despite the international audience it serves, an expansion roadmap wasn’t obvious for Feather, whose founders thought they might first seek a wider audience in Germany. However, they soon realized that the expat niche was particularly interesting for a digital-first offering like theirs.
Compared to the same age group of locals, expats are much more likely to prefer not to deal with a broker. But they still need help. As a French national, Audoire knows this firsthand, as does Schumacher, who moved to Germany after spending most of his life abroad.
While scratching their own itch, the duo know the market they’re after is very big, and increases. Whether you call them expats or immigrants, the fact is that Europe’s economies appear poised to hire more foreign workers to offset their aging populations.
Finding balance
To its end users, Feather promises a better experience consisting of transparent policies, unbiased propositions and simple digital claims processes, all in English. With its new funding, it’s also taking a “big bet” on employee benefit insurance that companies that hire a lot of immigrants might want to offer.
While it’s as tech-savvy as any insurtech player, Feather is also keen not to out-shine the legacy players it’s partnered with, and has some senior insurance executives at its table.
That, and its measured approach to fundraising and spending, could pay off, or at least help the companies avoid the scrutiny that new insurtech partnerships face. “For the last six years we’ve been doing healthy, sustainable business, and that allows you to unlock new things, even with incumbents,” Schumacher said.
