Podcast transcript #10: how technology can improve customer experience in the Chinese health care industry
Find here the full transcript of China paradigm episode 10. Learn more about Sebastien Gaudin’s story in China and find all the details and additional links below.
Matthieu David: Hi, everyone. Today, I’m with Sebastien Gaudin in this new episode of China Paradigm, our China business podcast where we interview entrepreneurs in China. Sebastien Gaudin is French. In 2014, you started The CareVoice, which is a healthcare solution in China, an app doing crowdsourcing of opinions and reviews on hospitals and doctors in China.
And you have recently pivoted on a SaaS model in China providing insurance as a service to interact, offer services, and engage with the users. So I’m very happy to finally interview you in China Paradigm. It has been months I wanted to have you on the show because I feel your experience would be so interesting and so inspiring for the audience, an entrepreneur in the healthcare tech industry in China, which is in Insurtech, which is a very hot sector today worldwide and especially in China. So thank you very much for being here.
Sebastien Gaudin: Yes. Thanks, Matthieu, for inviting me to your China podcast. Yeah, it’s a pleasure to share my experience. Of course, it’s always like time constraints, but I wanted to do it. I think it’s always important to give back and share more about what we do.
So, I think your introduction to my healthcare company in China is pretty on the spot. We started The CareVoice to address the mistrust from the consumer for medical services. Quite strong mistrust here. People are moving from one hospital to another and not compliant to doctors’ prescription or recommendation.
And many industries in China have been changed through the eyes of consumers. And so, the idea was to start, first, an app open to the public to let people share their experience and get ratings and recommendations for providers and doctors to be more confident about their choice.
But this pure B2C model is kind of a challenge. If you want to be able to scale, you need lots of funding. It delays revenues. The revenues are more linked to your user base, and likely more advertising related—why we wanted to stay independent for medical providers and hospitals not having any revenues from them.
So I think we made a pivot roughly less than two years ago. And where we are now and going, the company is mainly around two dimensions. The first dimension has been to focus on the privatization of healthcare. That mainly started this trend for the privatization of healthcare in China. And we started to offer that focus on affluent Chinese consumer and private clinical services.
And the other side of it was what you mentioned; working with insurers as software-as-a-service where we started to help insurance companies in China to change and move out from their payer role to more health partner role with their insurance members.
Matthieu David: Sorry, I didn’t fully get the first part. You said two dimensions of privatization of healthcare. So is this the part which is still the same rating?
Sebastien Gaudin: Yeah, I think the focus on this privatization of healthcare or related to the privatization of healthcare in China has been on the premium market, meaning our platform, at first, was open to the public. We had some segment of customers we are going after. It was not necessarily going for a higher tier of the market.
Most people in China go to public hospitals. This is mainstream. So even in terms of cooperation with hospitals, we were working with both public and private, especially because the public has been and is mainstream.
But then, we started to realize that, first, the general consumer is not educated as in other markets. So if you want to have valuable feedback that could be actionable for improvements and so on, it’s better to target more educated people.
And then, if you look at public hospitals themselves, even though some of them want to do better at the job, they have so many constraints. The first constraint is budget. And it’s the number of patients that visited their centers. So before they are really able to make a change in the way they manage their hospital, it takes time.
If you start to look at the private sector, it was really starting to boom. There is a lot of the need for building the confidence from consumers and really adopting more patient-centricity and more transparency in the way they do the care.
So it’s why we said we started to focus more on the affluent Chinese consumer; more educated and private sector. So private clinics, private hospitals, or VIP services of public hospitals which started to be a bit like the private sector.
So this was the first part of the new event, of course. The private health insurance component is also closely linked to this because, usually, you have private health insurance in China to cover the cost of care if you go for private care.
Matthieu David: I see. I understand your clients have been both hospitals, clinics, and insurance companies in China now.
Sebastien Gaudin: So, actually, hospitals and clinics are not our clients. We have been very, very clear from quite early in the process. We didn’t want to have any revenue streams from hospitals and clinics. We don’t want to have any incentive to send people to a hospital. We don’t want to have any incentive to select one hospital versus another. Okay.
What we do with the hospitals and clinics is we give them free tools, especially a patient feedback monitoring tool, so that they can collect the feedback from the patients when they come to you for care.
And from that, they can better do what they do. They can get analytics about the additional medical teams and compare with other hospital and improve their quality of care. And of course, it serves their reputation and the fact that it can help more people to be more confident to select those hospitals, especially people from insurance companies in China that are using our services.
So this is more how we work with hospitals and clinics. It’s open to any hospital and clinic who is embracing transparency and patient-centricity. We give them those free tools.
Matthieu David: How do you get your revenue then?
Sebastien Gaudin: So the revenues come from the insurance side.
Matthieu David: Okay. On the insurance side.
Sebastien Gaudin: From the pilot, we did with the SaaS model, we offer these mobile services to insurance companies that are using our mobile healthcare solution in China to create health services for their members. Right? So at first, was to help the insurance member to find medical services according to their own insurance. So let’s say, you are insured by AXA. You receive your policy pack, and you can, in one step, activate your mobile health service. And all the information about your own insurance plan is there. If you start to look at medical options around you, let’s say for a dermatologist or whatever specialty, you can check out which ones are going to be with direct billing, which one you’re going to have freely covered and which one would be out-of-pocket.
So this is how we started our business in China, the first version of the software as a service; personalizing the experience for you, according to your own insurance plan. And from there, in the past 18 months, we’ve been growing our value proposition and making our SaaS more and more valuable to the end-user, insurance clients and partners.
Matthieu David: I see. When you were saying two dimensions, they were dimensions of the momentum of growth, privatization of healthcare and the SaaS model, but that doesn’t mean two streams of revenue, because the only one stream of revenue is from insurance. Okay. I know that.
Could you tell us more about the size of the company now in terms of if you can disclose revenues, size of the team, number of users, number of clients, and the number of clients? I got some metrics on your website, but if you could share with your audience, it could be interesting.
Sebastien Gaudin: Okay. So this year, we are heading to roughly $2M annualized recurring revenue, which is a typical metric for a SaaS company. We have half-a-million users, close to 10 insurance clients and over 100 employers as part the beneficiaries for the employees of our health care solution for China.
Matthieu David: Okay. So you invoice your clients on an annual basis, not a monthly basis.
Sebastien Gaudin: So we have even longer-term contracts. We have contracts that could be a three-year contract. And then, the way to invoice is usually more on a quarterly basis.
Matthieu David: Okay. I see. I saw you raise money. I saw different numbers. I saw $2M, $3M depending on if I read on TechCrunch on other articles which are all the same data actually. So what is it now? How much have you raised?
Sebastien Gaudin: In total, we raised a bit more than $3M. Like most startups, like family and friends, would give money at first. And then, we did the angel round, which was our first significant round involving mostly entrepreneurs in China or Europe. This was in July 2015. So roughly, 18 months after starting the company.
And it was still before the Pivot. And then we joined Chinaccelerator in the late second half of 2016. That triggered some preliminary additional financing or investments, but that came as part of the round that we closed last year.
So, at the end of 2017, we closed our out first VC background. We also… our local Chinese healthcare investors. Yeah. So, totally, we raised a bit more than $3M as of now.
Matthieu David: Interesting. The one thing I really would like to talk about with you is, as I mentioned before, we had little time to prepare for the interview. There are some questions I want to ask you. One of them is how do you align the interest of so many people who have been around you? I’ve been very impressed by seeing how many successful entrepreneurs actually reach these people in the community of healthcare and the community of entrepreneurs in China has been its annual capital. Is that supporting you?
I guess you have thought a lot about it. I guess you have worked a lot about this on how to align all those interests.
Sebastien Gaudin: I think it’s just a matter of a few things. One is a French entrepreneur in the healthcare industry in China. So I think it’s always creating some curiosity from some people. Of course, some people may just think, “Yeah, it’s a bit crazy. It will never make it”.
But I think it creates some curiosity and some openness to understand better what we are doing and why. I think our purpose is positive, right? It’s positive, and it’s something that people can easily buy in, right? We are here to help people to have better healthcare in China, a better experience which is much more consumer-centric.
And each any of us has been facing situations for ourselves up close where we feel that it’s not simple at all to experience healthcare. So I think that’s quite something, a topic, that some people are sensitive to.
And then, it’s just because we have been lasting, right? It’s been like we started the company four years ago and we’ve been through different steps or stages. And, I think, now we’ve found our path, and we’re starting to really get great traction, great partners, and great clients. That’s just a matter of perseverance and being in a field that people are sensitive to, I guess.
Matthieu David: Going back on how you attract the eyes for entrepreneurs in China. I know you have been able to attract some of them. What do you offer them? Do you offer them some shares in your capital? Initially, do you offer them a board seat? Do you keep them involved with you along your path of growing? I feel you have this community around you supporting you. How did you keep them?
I think a lot of people are asking themselves. How do you keep involved the people around you when, actually, you’re growing your insurance business in China, and you need the money to grow your business. You can physically give them money, but not much. And on the board, you would like to have them involved. How do you manage that?
Sebastien Gaudin: I think that’s a good point. It’s true that, from day one, because I was moving from a large healthcare company in China to run a startup in the consumer space, in the technology space, I was underestimating the challenges, of course, to succeed. But I was quite clear about the fact that it was brand new for me and I had to find people that could help. And I was not able to manage to get co-founders at the start, but now I have.
I think I was joined by two great co-founders two years ago. But when I started my foreign business in China, it wasn’t the case. So I really wanted to find people that could have a different perspective. So I put together a group of advisors. So, people that I approached and said, oh, I knew them from my network or whatever. And I say, “Okay, I’m going to do this. I want to have support and advice from you from time to time”.
And on how you can get them to buy in, again, they need to buy in the vision and the willingness to. But then, of course, you give them something. So I give roughly 0.1% of the initial capital to each advisor. I’d start with something like 8-10 advisors.
And they had an option to invest at the same time with a special discount versus any other shareholder. And so, this is how some of them had also invested. Or, they took a role first as a pure advisory. And when we did our angel round, they came in because they’d been observing the company for 12 months, 18 months.
And I took people from leading healthcare communication agency, like a leading tech company, like Airbnb, people who succeeded in e-commerce in China and later on sold their companies. And these, actually, I’ve been re-doing it with shareholders because you’ll need those advisors involved over time.
So I would say every year, then we brought in new advisors. So some were remaining. Some were lasting because they were able to continue to help us and support us. And so, then, we started to really put in place like a one-year advisory contract where we will grant options for shares that we invest after one year where they have been fulfilling their support.
So, of course, it takes a bit of time also to meet from time to time. But, actually, the way also to do it is to have really, really good communication to your shareholders, advisors and also the community of investors. So we’re trying to have, every four to six weeks, a newsletter that goes to the broad investor community that is involved; shareholders and advisors from whom on some topics we may ask for help.
And, of course, we can also seek specific help from some advisors on specific topics. But I think it’s something that I did from day one. And it’s really part of an accelerator program; the way they help you to continue to nurture this kind of relationship with advisors.
It was with Chinaccelerator and more recently, Opinion Accelerator we did. I think it’s highly valuable, but, of course, you need to give transparency and help people to understand what you do, right? Otherwise, there’s no way that they can feel part of it and come and help you with it.
Matthieu David: It’s very, very interesting. And how did you get those metrics like 0.1%, giving them a contract where they are able to invest later on at a discount? Were you advised? Were you reading? Off the top of your head, did you say that “We are going to give 0.1%”? How do you structure that?
Sebastien Gaudin: I think it’s a combination of ideas. There are a certain, startup, level of shares that you give to an advisor when they are at the backline. And usually, it’s more 0.5%, 1%, 1.5%. But usually, these guys, you really put them, and they come at once, and they are really part of your company. I think they have really strong engagement.
This is softer. These advisors are more soft engagement. And then, you just need to have something which is a bit significant. Significant and symbolic, right? So the equivalent at first was something like $3000 or $4000 free shares. With the first round, we raised $200,000.
It’s like if you look versus how much we raised, it starts to be a bit significant at this scale. Of course, now it was 10 times more, but I think now we are granting this equivalent of 15 shares now. Now, it’s like $10,000 or $15,000 equivalent, but it’s really more on a contract basis with some milestones and investing.
Matthieu David: I see. You were talking about co-founders. You said you started alone. Then you found co-founders two years ago. So basically, it was already two and a half years you started. How do you find them? How do you build trust? How do you make sure they are the right ones? And finally, how do you integrate them when you have already done so much alone? That’s a question that a lot of people are asking themselves. How do you tackle this issue?
Sebastien Gaudin: Yeah, I think it’s very tricky. And, of course, I would have liked to bring in, early on, co-founders that could help them to grow the company faster. Especially, then, you need early on have complementary skills, right? There is no way that you can hire super simply senior people or talented people to fit the gap that you have and what you need.
At the early stage, the only way is to have co-founders. Yeah, I think I tried at the very beginning, but at first, I was not at all in the network of entrepreneurship in China in the tech scene. At least, you see most of the guys who are already known for that. And I was not really clear neither about what I would need at first until you are really in.
It’s been really interesting. I tried a few later on differently before preparing the most significant round with VC. I knew that it was something that you really reduce your chance to raise significant capital if you don’t have co-founders.
So it was in 2016 where I really decided to bring in co-founders. I actually hired two temps before getting this done. The first one is a person that came and worked for me, for my healthcare solution in China. We worked together for 4-5 months. In the process of hiring, she also met our board members or senior advisors. A very good fit potentially. And actually, the experience of 4-5 months had been more, for that person, a kind of difficult challenge because they were still at a very early stage.
So I think not enough used to a startup, never had real startup experience, which of course when you see how tough it is and you have to build everything and still, there are many things that are not built, and you still need to run, right? So that was not the right fit.
And then, there is another guy who was also a potentially good fit with, that time, startup experience, but he was a bit more of financially constrained.
So the idea was he worked with me on the side, not on a position for kind of six months until we were supposed to raise at the round. But actually, raising the round took us 12 months more. So it was too long for him to wait.
And this is the best way. I think what happened was that my two co-founders came in when we did the pivot to InsurTech in China. So to some extent, it’s kind of rebirth of your company also, right?
Your healthcare company in China is just like changed drastically in the way you create value. And one of them actually had been a professional friend. For two years before, he was already a professional friend. He was starting to advise the company more on the advisory side for at least nine to twelve months before taking the role.
Yeah, I think he jumped in as soon as it was a good window. We did the right pivot and started to have a dimension. And from his professional life, it was also the right window. So, that was perfect.
And the second one was more recommendations from our investors.
Matthieu David: Okay.
Sebastien Gaudin: So when a foreign investor, VC investor, did recommend us, it was also a very complimentary profile versus what we were newly built.
And someone who had experience in startups, someone who had experience in various industries. And to your question about how do you get them on board and so on. You should stop to be the one deciding the rules. You should first break really the responsibilities.
And the way we did it was quite interesting. You look at the stakeholders around us who we need to engage; investors, shareholders, end-user, prospects, and so on. And each of us was accountable for different stakeholders, meaning all the activities behind it, and different KPIs, of course.
And this is how we started to frame a very separated scope. And then just the principle of taking decisions together when there were some problems when there are some issues about the company — and really being transparent because we were rebuilding the company on a new offer. Then, I think it worked.
Matthieu David: Very impressive. So basically, in about two years, you build a new business model with insurance companies in China as clients. And you are now at the $2M ARR within two years, which is a very, very quick growth, basically, because you didn’t leverage much of the past business model, right? It was totally new two years ago.
Sebastien Gaudin: Yeah, first, It’s the platform. For instance, our technology assets are the same. And we built on the initial platform to create this Saas business in China. So, of course, it’s not like building a new company from scratch. We’ve been able to leverage a lot on the company’s technology, data, and our network of hospitals and clinics.
That is also very important in the SaaS model for Insurance, and also the credibility of the company in the healthcare industry in China, which is very important.
Matthieu David: Talking about the product, so actually I downloaded the app. The tutorial is very intuitive. So you get how to use the APP very quickly. You get the rating very quickly on the hospital as well. You see comments on the hospitals on different providers.
Could you tell us more about what, currently, the app is solving as problems for the insurance companies, for the users, and for also, I guess, the stakeholders you talked about, the brokers, and everyone surrounding the health tech industry in China?
Sebastien Gaudin: I guess the app that you are referring to is the free version you have that is available on Appstore. For anyone who wants the first level of content and services. And this is mainly the similar app that we started with. Of course, it has been upgraded over time, because the rating, the recommendation, and the search engine is the same that is also used for our SaaS for insurance and the insurance members.
But as soon as you use our solution as our insurance member, you have a different experience. Either it could be inside our app, or it could be inside the app or the Wechat of our insurance partner. We bring our mobile solution wherever our insurance companies’ clients want to engage with their insurance members.
So it depends on the existing assets and digital assets. And so, now we use the three dimension of helping insurance members to stay healthy and encourage healthy behavior and helping insurance members to easily find and access medical services, and thirdly, make their use of insurance benefits very transparent, and also encourage easy and fast access.
For instance, now we have a step tracker. We have weekly targets that can be activated for some of our insurance clients to indeed encourage more physical activities and have a direct impact on your premium.
We have an AI, a virtual health assistant, which is powered by Mayo Clinic, which is a leading a US medical institution, through which you can discuss like we are discussing now or chat with this bot for 5-10 minutes with your symptoms. And from there, it helps you to understand what is the likely underlying condition that you have and what should be the course of action. Can you manage on your own?
So there’s a significant self-care component on it and administrations you can manage on your own. You don’t need to see a medical professional. And if you need what kind of a specialty is, you get to see what level of emergency you need. So it’s really to help you to manage your symptom and know what you should do.
And from there, we can guide you to an online consultation. We partnered with some online consultation service. Or, directly to offline; referring you to a hospital or clinic. And then from there, if you need to, of course, submit your claim and get your reimbursement, this is done fully online, so it saves you time whenever you try to get back your money. You can order your medication online from our partner pharmacies. You can upgrade your insurance if you want to have more benefits.
So this is mostly that kind of customer-join for the end-user as soon as you access the upgraded version.
And so, you are asking, for the insurance, what’s the value for them, right? I think insurance companies in China are facing a number of issues among which their plans are not that attractive if now they are not competing with some services.
If it’s just an insurance plan, you know that if you have a problem, they are going to pay for this, but you’re even not sure because it’s not that easy to understand those plans. Anyway, that’s a different topic. But it’s really about helping those insurance products to be more attractive because they are more supportive of the health needs of the potential end-user or employee or individual.
And this means that by doing this, they have more sales, right? They are more likely to sell. And we have already measured this kind of future percentage of sales if you bring the solution with your plan.
The second thing is as soon as you have these kinds of surveys, you can measure the succession and the retention.
And already, we have up to 40 percent higher renewal rate when insurance members are on the solution in the service versus not. So that’s also a very direct impact, of course, for insurance.
And when you have this to generate a lot of data about your customer, about the medical network, that helps the insurance company to keep improving their product to make it more personalized. And then, if you are a member of a mobile, you can utilize a number of administrative-related tasks of the insurance.
For some privatization, some different papers that I have done today offline that can be done digitally. So then you reduce the cost of very human-intensive activities like a call center or claim management. And it drives, of course, cost down for them.
Matthieu David: I see. There are a lot of different topics raised here. And one of them I am a bit surprised at is all those insurance companies, AXA, Ping An and others you are working with are supposed to already have those kinds of software or APP. We expect them to have at least the money to invest and abilities of thinking of that. Did you replace something existing or did you create something new?
Sebastien Gaudin: Some of them have some beginning app to begin, right? And especially most of the apps are more claim-related, which is more the administrative element of it. You have insurance. At least, you want to be able to submit your claim online. But I think it’s kind of a wrong start because you start not really helping people with their health.
So the usage of this and the company aspect of it are not that high. And the problem is the assumption you made that they have the capabilities and so on. That’s not true. They are not a digital company. They are not a technology company. People have it in their minds that creating an app is simple, but now with the evolution of technology and what’s happening, it goes too fast. There is no way to catch up with technology. Quickly, an app becomes obsolete and not attractive enough.
And so if you want to really bring something highly valuable and leveraging the latest technologies that are going to continue to work for your customers, software as a service is becoming the standard across industries. It’s like for Salesforce. If you imagine you build your own CRM, it doesn’t make sense, right?
It doesn’t make sense to be in your own Salesforce. It’s the same. If you want to create engagements around health insurance for your customers, don’t try to build something. Look around, and now you have companies like ours which use the software as a service that ensures you’re going to have a very personalized experience for your insurance members that reflects your brand, that reflects the service that you want, that reflects your insurance plan, and that is highly cost-effective.
When you build an app, it costs you X. You don’t know what is going to be the usage. You need to reinvest regularly and so on, while software as a service is pay-per-use. So it’s a very efficient model.
Matthieu David: I see. Talking about the development, you said it’s a full-time job to develop the apps or develop software. Currently, you are on IOS; you have a mini-program on WeChat. Could you tell us a little bit more about your ecosystem development specifically tailor-made for China, but also speaking about your development platform?
Sebastien Gaudin: I think the core is the backend. And soon, we will reveal the way we see now that the product that we are heading to has kind of an OS system, kind of a CareVoice operating system.
So we have a kind of backend architecture where we can very easily and ultimately customize the digital experience in China for any insurer or any partner we have for their end user. And this takes us a few minutes. And we can also give and grant access to our partners to do it themselves. So I think that’s a very solid element there.
The other element is that we have some technologies that are really advanced technologies that we wither build ourselves or we partner with third-parties. For instance, with the AI virtual health assistant, we made a partnership with a US Tech Company, Sensely. We had them to localize here for this part of the world and also to embed this into our full customer journey for insurance members because with the outcome of the virtual health assistant; you still have ideally the need to combine this healthcare navigation or recommendations from online consultations.
So I think these are the two components; the structure, the backend, and some technologies. And then, it’s for people on any software, right? So we are available on IOS, on Android, and inside Wechat. And we can bring this mobile solution in the environment of insurance. So then we also for now, either on Alicloud or Pingan Cloud, especially since we joined Ping An Accelerator.
And so we have the ability also to bring our SaaS business in China in a different cloud requirement or even on-premise, possibly on a private cloud for some insurers.
Matthieu David: Talking about the AI you brought from the US, the AI is linked to voice. So a part of your job has been to adapt it to China in terms of voice and the content and the language. Are you leveraging this AI from the US see it’s a Western AI, so the standards are different to us very often how western players are positioning themselves in China?
Sebastien Gaudin: Actually, it’s not really about the….. The Chinese are very good at AI, especially in natural language processing and Chinese recognition. So actually, there are different components in this technology partnership, and some components actually come from a Chinese company. But actually, we are leveraging this more with Mayo Clinic, which is a US top leading medical provider. All the medical content and the clinical algorithm behind the investigation and the outcome of this conversation with the Virtual Health Assistant comes from Mayo Clinic, which is, of course, very good for the branding and the confidence of the Chinese consumer.
Matthieu David: How do you deal with regulation in China? Healthcare is a very regulated sector everywhere in the world. Healthcare in China, I guess it is as well, even maybe more. You are bringing the AI from the US. How do you deal with all those questions?
Sebastien Gaudin: I think the main regulations are on….. there’s one which is more like business licenses—how you can operate and so on. And for now, CareVoice operates without any ICP V.I.E model because we don’t sell services online. And the sales are closed. It’s more like B2B business, but at one point, it may be something that we won’t start to approve.
Matthieu David: For people who don’t know, V.I.E is Viable Interest Equity, meaning that you partner with Chinese equity which is invoicing for the clients because the foreign company cannot invoice. For instance, in trouble, it’s very often V.I.E, so that purely Chinese equity will be invoicing the clients.
Sebastien Gaudin: And Internet.
Matthieu David: And Internet. Yes. As well. The V.I.E system. Some companies are listed on NASDAQ with the V.I.E structure in China.
Sebastien Gaudin: But for now, we are not exposed to… another kind is more about user privacy data, which is also a very important topic. Actually, people tend to think that China’s regulation on that is behind or not necessarily aligned with other countries.
If you really go through the Chinese regulation, guidance or the latest issuance, they are also very strict. I’m not sure they are enforced in the same way, at least for now. I’m sure that it will come. But on our side, actually, we comply with both US (Very, very important to the US, for healthcare, is HIPAA) And more recently with Europe (GDPR) because we have partner insurers or on-per-service providers that are requiring this.
So we definitely are compliant and effective to the Chinese relation. So definitely, user data privacy and security are highly important. You can’t be an insurance company if you don’t comply with this regulation.
So, then, the one you were referring to is more for a medical license. AI is not a medical diagnosis. It remains a self-assessment tool for the patients, for helping the patients to make their own decision. But it can’t replace a medical diagnosis by a licensed doctor.
So you need to be very straight about the disclaimer on that. Of course, the content is of high quality. It’s coming from medical providers, but ultimately, it’s not replacing a medical diagnosis.
Matthieu David: I see. Okay. As I mentioned before (actually before we prepared the interview) I feel you are very present in the media. You’ve been to Amsterdam. I see some press release in Amsterdam, in Shanghai, and Hong Kong (in a Fintech forum). You are very, very active on all those forums. What does it bring you? Does it help you actually find your co-founders, find investors, or find partners? What do you get from it and how do you make use of it?
Sebastien Gaudin: Yeah, I think it’s always a tricky decision to say whether I should do this. You need to have your own strategic goals and see what fits in and what doesn’t. So, yeah, I think quite early on, I’ve been very open to and actively seeking exposure opportunities from these kinds of events. But they evolved a lot over time.
I think at the very beginning, it helps you to start to be a bit more recognized as a startup, or emerging. I remember we were C-star number two in Shanghai, which was a big competition and so on. And it was good to reach this. It was, I think, at the time of our angel round. So it was more like the exercise of pitching and potentially meeting some angels around, but I guess it was more a way to show that our startup started to be recognized during the first one or two rounds.
And then came the pivot to InsurTech in China. And that’s why it’s very critical to be recognized by insurance industry leaders (InsurTech conference) as one of the emerging InsurTech companies. So from, let’s say, September last year, mid-last-year, for six months. Yeah, we took many opportunities to do this. And it was also a time we were closing the round. So it was good to show investors that we were recognized by top insurance industry leaders conferences and InsurTech in China.
We’ve been at the Digital Insurer, Singapore, Asia where we were first runner up (Pacific Insurance conference in Hong Kong). We were six InsurTech companies speaking to the top leaders of the insurance industry in China. Yeah, a few examples like that. And actually, that was the first objective.
But the second objective was BD at that point in time because all these guys in the room are insurance leaders. And we had 6-9 months of launching our insurance with first insurance clients. So we were in the phase of, of course, building up our clients. And that has been very effective; directly meeting CEOs, C-Level executives in those conferences, people in charge of innovations which are potentially the first sponsor or the first guys that are going to bring you inside their company. So this is really pure BD and seeking sales.
So the first was to get the recognition that we became an InsurTech among the emerging Insurtech companies in China and to generate leads for insurance.
And part of the third component is more premarketing for new markets and new geographies. So we went to Southeast Asia or Hong Kong (Singapore, mostly) and as you mentioned, in May, we were invited to speak at a big InsurTech conference.
It’s also part of kind of premarketing to start to how it is perceived beyond China Mainland. And that was also the pre-step before deciding to launch in Hong Kong. We officially launched in September in Hong Kong, but we did generate leads across the Southeast Asia region.
We had interest in Malaysia, in Singapore, and Indonesia from a number of insurance companies. We assessed all that in February and said, okay, let’s go for Hong Kong for a different reason. It’s the best choice to start with outside Mainland.
And in May, we did the same this year for Europe. And we started to see a lot of interest there. Now we are doing a strategic round with strategic investors, meaning we bring insurance-related investors to the capital of the company. And, of course, this is also part of the way you connect with the right people and prepare potentially for expansion beyond Mainland China.
Sebastien Gaudin: We are living in China. We live in it every day, but it’s very new for the people. Like someone in the CRM system from France was asking me how we had to follow a client in China. And I’m thinking about the POS (point of sale), how many people use cash? I told him that 99% have Wechat or Alipay. With payment, they will use the QR code. So you don’t have to be worried about it.
Matthieu David: What do you feel are the differences in the health tech industry in China and the rest of the world?
Sebastien Gaudin: I think what you mentioned is obvious. China is very, very advanced now. Interestingly, in the insurance industry in China, they are hearing a lot about what’s happening here. A company like Ping An became the number one insurance in terms of business size worldwide.
And more importantly, in terms of innovation, they’ve been investing in the technology space. Ping An has already been incubating several companies that have been IPO, Ping An, Good Doctor. Insurance overseas is just like looking at that and saying, okay, they are building a really strong ecosystem service to consumers. They are the next generation to capture the new insurance products. And I mentioned Ping An, but Zhong An is also another very strong example, a full-stack digital insurer.
So we see that China has been our home and more importantly, our R&D head. It’s here we’ve been building CareVoice. We’ve been building our SaaS business in China. We are going to continue to innovate. And interestingly, these are innovations that are going to go now across markets.
Hong Kong was a good move to go because it’s a very mature market, generally speaking, especially for health insurance. Everybody has private health insurance. It’s normal the market is very privatized. So the fact that we’ve been localizing our platform, there, matching the requirements. Also more demanding, I mentioned about secrets compliance More than many markets at this aspect.
But at the same time, it’s also a market where that’s a big desktop oriented, especially employer-employees. People in China are not yet using as much as mobile as he is. So there are some adjustments that we also do. But, it’s picking up definitely. I was discussing with people in Northern Europe. They are already cashless. They are already mobile. So it depends on the countries in Europe.
And then, if you look at Southeast Asia, Southeast Asia is following what’s happening in China. So very quickly, all these smaller countries, Southeast Asian countries, that already have mobile first, I think, are going to be sub versing direction of what to do.
Matthieu David: Interesting. Thank you very much. Thank you very much for being with us in our episode of China Paradigm, our China vlog, dedicated to interviewing entrepreneurs in China. I hope you enjoyed it.
Sebastien Gaudin: Yes. Those were great questions.
Matthieu David: I hope you enjoyed listening to us. Thanks for listening.
China paradigm is a China business podcast sponsored by Daxue Consulting where we interview successful entrepreneurs about their businesses in China. You can access all available episodes from the China paradigm Youtube page.