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 expatriates working and living in Europe.
It’s not that there are no options for foreigners to obtain insurance; there are plenty. But it is precisely because the offer is fragmented and difficult to adapt to individual needs that Feather believes it can carve out a space for itself despite strong competition from traditional operators.
Since expats often have access to their host country’s public health system, a big part of the question is where they fit in, especially during the transition periods that are increasingly common with the rise of remote work.
This is the level of detail the startup wants to achieve, Feather CEO Rob Schumacher told TechCrunch. For example, it offers a recommendations tool to help people understand what type of coverage they might need, starting with health insurance, but also including additional options such as life, pet, auto, and personal liability insurance.
“The funny thing is that all expats understand it immediately,” Schumacher said. That helped Feather obtain angel checks from former founders who gained knowledge about the topic 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 venture capital fund he co-founded, called Plural. Feather’s main investor, Keen Venture PartnersIt even came in an inbound manner: it was partner Abdul Afridi, an expatriate, who approached the startup, and not the other way around, Schumacher said.
However, fundraising has been anything but straightforward for insurtech startups in the post-2021 hype, and Schumacher fears the process may seem easier than it was.
With the French neoinsurance company Luko falling apart In the background, and other very public problems of insurtech, overcoming due diligence was not an easy task. As talks dragged on, Feather’s founders considered simply returning to profitability. “And I think that was the key that made us really interesting again,” Schumacher said.
International expantion
Feather accepted because its new backers brought expertise on a wide range of issues, including branding, but especially because the capital will help fuel its internal expansion. The startup currently serves expats in Germany, France and Spain, and will launch in three more countries by the end of 2024.
Schumacher said he wouldn’t have achieved all this without additional funding. “We would have just done more incremental things.” That would likely have been a missed opportunity: the startup says it achieved more in the six months after launching in Spain than it did in its first 18 months in Germany.
Despite the international audience it serves, an expansion roadmap was not obvious for Feather, whose founders thought they could first seek a broader audience in Germany. However, they soon realised that the expat niche was particularly interesting for a digital offering like theirs.
Compared to the same age group of local residents, expats are much more likely to not deal with an intermediary, but still need help; As a French citizen, Audoire knows this firsthand, as does Schumacher, who moved to Germany after spending most of his life abroad.
While scratching their itch, the duo is aware that the market they are targeting is the very big, And growing. Whether we call them expats or immigrants, the fact is that European economies seem determined to hire more foreign workers to compensate for their aging populations.
Strike a balance
For its end users, Feather promises a better experience consisting of transparent policies, unbiased recommendations and simple digital claims processes, all in English. With its new funding, it is also making a “big bet” on employee benefits insurance that companies that hire a lot of expats may want to offer.
While he’s as bullish on technology as any insurtech player, Feather is also keen not to speak ill of the legacy players he partners with, and he has a couple of top insurance executives on his cap table.
This, and their 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 past six years we have been doing healthy, sustainable business, and this allows us to unlock new things, even with incumbents,” Schumacher said.