The insurance industry is ripe for disruption from cloud computing. In the bad old days, each company developed its own proprietary IT systems which created a high barrier to entry for new players. And it’s a big industry – over $1 trillion in the US alone.
Auckland-based InsuredHQ provides a feature-rich but easy to use cloud-based quote and bind system for insurance companies and brokers. The product was borne out of a desire to improve insurance services in emerging markets, and facilitate the distribution of microinsurance. Once launched, the founders quickly found that there is also a very large market in existing insurance companies wanting to replace their clunky server-based IT infrastructure to more modern cloud-based services.
This business has a social mission. There are 4 billion people in the world who can’t access insurance due to unattractive margins for existing players, and high barriers to entry for new players due to limited technology options. By automating as many of the processes as possible, and cutting costs through simplifying business processes and service offerings, InsuredHQ makes it economically viable to service the long tail of the world’s underserved potential insurance customers.
And they’re starting to get some interesting traction. After launching in March 2015 with a broker in Samoa, they also have companies up and running in South Africa, the Solomon Islands, Papua New Guinea and New Zealand. They’re now implementing a full insurance company rollout in Curaçao and working on implementation agreements with several others. Their product is ready for scale, and they’re collecting leads without putting any money into marketing.
InsuredHQ’s global rollout strategy involves working with technology integrators who have on-the-ground experience in the developing world. They are currently finalising agreements channel partners in Africa and Asia.
Competition seems to be weak – at a recent microinsurance conference they attended in Morocco, they were the only technology provider present. The big players are notable in their absence, and InsuredHQ seems to have the first mover advantage in what should expand to be a significant global market.
They make money through a set-up fee, a monthly subscription, and a small commission on insurance closed through the platform.
They are already a global company, with their head office in Auckland, development spread between Australia, Bangladesh, and India, and their recently hired Global Sales Director in Hyderabad.
InsuredHQ are embarking on an angel investment round of NZD 1.5m to expand the sales team and provide 24 months of runway. Previous investors include McNaughten, some family members, and a bit of industry strategic seed money. If you’re interested in this opportunity, talk to Anthony.
I travel internationally by air a fair bit, but always worry about my checked luggage. Has it been “inspected” by security agencies? Have baggage handlers roughhoused my precious belongings?
Intrude A Lock is a simple but ingenious device which you can put into your suitcase before you go, and then query using your smartphone after arrival to answer these questions. It collects the required data (light and intense movement), and then reports this data back to your phone along with the time and date of the actions. The proposed RRP is NZD 70.
Elisha Fleming is the 18 year old entrepreneur who came up with this idea a couple of years ago as a result of his own travel experiences, and talking to people who worried if their own bags had been tampered with. This year in January, he entered CreativeHQ’s Venture UP programme which, in partnership with the Young Enterprise Scheme, provides a six week accelerator to help entrepreneurial students commercialise their ideas between their final year of high school and their first year of university.
Elisha has just finished up at Garin College in Nelson with Merit in NCEA Level 3, and is on his way to doing a double-major in Finance and Entrepreneurship at Waikato University. His future didn’t always look so bright, however, as his family was told at an early age that due to medical issues, he’d never be able to succeed academically. Not willing to be held back, he carried on in school, but also started his own business trading goods on TradeMe, and managing his family’s property investment portfolio. Today, Elisha has a minor speech impediment, but he’s sharper and more savvy than many you’ll meet in business. “I’m always searching for a ‘yes’ rather than a ‘no’,” says Elisha, which has helped him learn incredible resilience.
At Venture UP, Elisha was joined by Hayden Washington Smith and Keith Toma, who were inspired by the product and mission. Hayden will continue on in the team as Director of Finance and Marketing, while he embarks on a law degree at Victoria University this year. Advisors include Glenn Andert and Matthias Andermatt.
The team completed the prototype during the programme, and are currently manufacturing a small pre-production run. They have managed to secure a trial with an overseas global brand in the transport industry who are interested in selling Intrude A Lock to their customers through their retail channel. They’ve also had significant interest from baggage manufacturers who want to incorporate the device into their products. Their main sales strategy focuses on channel development, using airlines, logistics companies, and manufacturers – they feel this is higher value and lower hassle than selling directly to consumers.
The trial should complete before the end March 2016, and Elisha is confident of success. If he pulls it off, that would mean he would be running an international manufacturing business from New Zealand at age 18. Longer term, they want to specialise to be the experts in protecting high value goods such as human tissue during transport.
Venture UP’s Programme Director Nick Churchouse had this to say about the team:
Elisha, Keith and Hayden were a stand out team at Venture UP – they boxed through more challenges than most. There are natural hurdles facing any hardware business, let alone a tech-connected product tussling with airline security, personal liability and ornery issues like damage and loss liability. Despite this the Intrude A Lock team built a strong proposition, got out of the room, engaged with aviation industry leaders and got a deal on the table in less than six weeks. If that’s not Venturing Up I don’t know what is.
Young Enterprise CEO Terry Shubkin adds,
Intrude A Lock is a great example of what can happen when you take the un-inhibited innovation that comes with youth, and couple that with a programme that provides structure, support and networks. It’s a great product which has been well-validated, and I can’t wait to see where the company goes next.
The Venture UP programme finished last week, but Intrude A Lock are going strong, and ramping up. They’re looking for a hardware developer and some seed capital, but most importantly, they’re looking for preorders and connections to potential channel partners. If you’re interested or can help out, contact the team.
NZ’s first commercial Internet of Things platform.
KotahiNet is building the first real commercial platform for the Internet of Things (IoT) in New Zealand, which is set to disrupt our daily lives in ways we haven’t even started to imagine. Just look at the predictions:
Gartner: 6.4 billion “things” will be in use by 2016, 20.8 billion by 2020 IDC: The worldwide market for IoT solutions will grow from $1.9 trillion in 2013 to $7.1 trillion in 2020 McKinsey: The IoT market will be between $3.9 and $11.1 trillion by 2025, 11% of the world’s economy
There’s a broad perception in consumerland that IoT means home automation like refrigerators and central heating, but in fact many of the transformational high-value impact will be in business and government applications.
KotahiNet have deployed a carrier-grade IoT network in Wellington, and are planning to build that out nationally. They’re using Low Power Long Range (LoRa) open-standard equipment, which is already interoperable with countless different devices types. The Wellington deployment is provisioned with 5 gateways, each of which can cover 7,000 devices, with an aggregate maximum bandwidth of about 5Mb/s. While this kind of network can’t handle video, it’s great for IoT devices which are very efficient in their bandwidth usage.
LoRa is a really interesting technology which provides highly reliable transceivers that operate at low bandwidth over long distances, and don’t require battery changes for 5-10 years. That means that you can put them in awkward-to-reach places that don’t require power or local Internet connectivity. They can live happily in the bush, on the farm, on an animal, in a lake, or at the top of a tower – perfect for building wireless sensor networks.
KotahiNet aim to expand their LoRa deployment to Auckland, Hamilton, Taranaki, Christchurch, and rural Canterbury over the next year, and go nationwide after that.
But the network is only a means to an end. According to founder Vikram Kumar, the real value in what KotahiNet are building is in the data layer and application layer that sit on top of the network connectivity layer. They’re building the network because they have to – they can’t do any of the cool stuff they have planned without a basic network in place.
Once that network is in place, they’ll provide “data-as-a-service” derived from IoT devices. Most people won’t want to manage and maintain devices, they just want the data that they generate in an easily digestible form. This is especially important when you take security into consideration – you want to make sure that all of the Things are secure, protected, and behaving themselves. If that’s not core business for you, it’s likely to become a problem, a problem that KotahiNet prevents by worrying about that for you. An example of a data-as-a-service network would be a dog tracker network – KotahiNet would provide the GPS sensors and data feeds, you just consume the data that you need and do what you want with it.
Further up the value stack, they also want to provide end-to-end solutions via an application layer for business and government using industry standard components. They are implementing a system for olive growers in the Wairarapa which slurps data feeds from private remote weather stations, and notifies the growers if they need to bring out the choppers to protect the trees from frost. The growers aren’t interested in owning or managing the equipment, network or even the data, they just want the alerts.
Local governments are a big potential area of development. One local council is looking at installing a smart network of over 20,000 streetlamps. This would enable significantly lower power consumption as well as maintenance costs. When you consider the number of such Things a council has to look after in the public interest, it’s not hard to imagine thousands of other applications. And that’s just the start.
Conservation is another interesting area. KotahiNet are working with EcoNode on Great Barrier Island, whose TrapMinder system notifies HQ whenever a pest species such as rat or possum has been trapped, so that the trap can be cleared and reset. They are planning to roll this out to Zealandia in Wellington, and then across the country.
KotahiNet monetises through connection charges (listed as $1 / node / month), data-as-a-service charges ($3-5/month), and custom application provision charges.
Vikram believes that New Zealand could become a world leader in IoT deployments in primary industry, and they’re seeking partnerships with significant agricultural players to build the next wave of applications that will not only help boost our agricultural exports, they’ll also provide the basis for technology exports too – KotahiNet’s internationalisation strategy depends on this. IoT will bring a new level of precision to agriculture previously unobtainable in NZ, and these novel applications can be sold to the rest of the world. Vikram is also passionate about Blockchain technology, which when applied in the application layer, could provide security and verification around the provenance and authenticity of agricultural produce.
As an aside, Vikram has had a very interesting career path, from working in the merchant navy to being a public servant, then working as the CEO of InternetNZ before moving to be CEO of Kim Dotcom’s MEGA (not to be confused with Mega Upload), and very briefly serving as the Chief Executive of the Internet Party.
KotahiNet are currently raising NZD 1m in an angel round to expand that team with execution capability, and provide capital to build out the next phase of the network. If you’re interested in the opportunity, contact Nick Gerritsen.
Once that round is closed they’ll be hiring sales people, solution architects, and network ops people. And of course they’re interested in talking to anyone who wants to do IoT deployments that require carrier grade low-power networks. For those, contact Vikram.
Disrupting the retail energy industry with price transparency and great service.
Electricity is the world’s purest commodity – you can’t see it or touch it, and you have no idea where the electrons came from that power your appliances. The equipment that manages electricity distribution is all automated. Why is it then that most of the power industry seems to be operating in the dark ages with respect to customer service, pricing, and information provision?
Flick has a simple business proposition: they put the customer at the centre of everything they do, give you electricity at the wholesale spot price plus a small well-known commission, and give you access to a wealth of easily digestible information that helps you manage your own power consumption.
The small, well-known commission is 40c per day plus 1.5c per kilowatt-hour (KWh) for a standard user. That amounts to the country’s least expensive power. Flick claim that even if you switch to Flick and do nothing to manage your usage patterns, you can save approximately 7% off your bill, because the major power retailers use their customers as a hedge against fluctuations in the wholesale market. The risk to Flick’s customers is that their bill may occasionally be higher during periods where the spot price is high.
But the real savings kick in when, armed with the reports about your usage you can view as a customer, you can change your usage patterns by deferring load into periods when the spot price is lower, for example running your clothes dryer and dishwasher at 4am. Flick claim that you can save about 25% off your energy bill by doing things like this.
Mid-2015, Consumer NZ ran a survey rating customer satisfaction of power retailers, and Flick scored a remarkable 96% satisfaction rating. They claim that everything about the company is so automated and well-engineered that there’s really nothing to complain about. All bills are paid by electronic payment, the customer web interface is excellent, and pricing is transparent. You can always know what your usage and charges are doing on a half-hourly basis, so there’s no possibility of being shocked by a blow-out bill.
Flick was registered as a company in July 2013, took on their first beta customer in December 2013, and did a soft launch in August 2014. In the past 18 months they’ve grown to be the tenth largest energy supplier in New Zealand with nearly 8,000 customers, growing by roughly 15% per month, and despite their small size, they are the supplier with the second largest number of net customers switching to them monthly, and the only one of the top 10 who is not vertically integrated.
There’s plenty of innovation yet to be applied in this space – for example peer-to-peer power. Your neighbour has a solar cell farm (they’re getting cheaper all the time) and could sell her power directly to you, via the Flick platform. Or, you have smart power points or Nest installed, and you want to interface directly with Flick, and only have specific devices – or even temperature settings – active only under certain pricing conditions.
I’ve known Steve O’Connor, Flick’s CEO and cofounder for many years, and recall him talking about setting up a power retailer in the early 2000’s – at the time, I thought he was mad. But he’s assembled a stellar team, including Simon Pohlen, Jessica Venning-Bryan, Jurjen Geerts, and Shannan Hargreaves. They have the broad and deep experience capable of making a major dent in the $9b market in NZ. And so far, they seem to be executing very well.
But the real prize is overseas markets. Flick are hatching plans for overseas expansion which will most likely be centered around licensing deals and joint ventures rather than direct entry.
So far, Flick has received funding from their original founders, an Angel round led by AngelHQ, a growth round, and then took on some institutional investment, which is a considerable achievement in such a short space of time, but reflective of the company’s rapid growth. They’re planning another investment round late this year, which will be aimed at bringing the NZ business to profitability, further improving the platform, launching several new initiatives in the retail space, and start seriously exploring the overseas opportunities.
You don’t need a particularly creative imagination to see a number of exit possibilities, but for the time being, they’re focusing on what great startups do – building and scaling a sustainable business with a fervently loyal customer base, delivering frictionless service, driving down costs to the consumer, and causing pain for the competition.
The Internet enables cloud-based, customer-centric, low-cost, transparent, on-demand businesses, and Flick are leading the way in New Zealand using this power to disrupt comfortable oligopolies. If I were a Flick customer, I’d be delighted, but if I were an incumbent power retailer, I’d be very afraid.
Speeding up science through the power of peer review.
Scientific research is the key thing that moves our society forward, expanding the boundaries of human knowledge, enabling us to rigorously test which things are true, false, or needing further inquiry. It enables everything from cellphone technology to antibiotics.
The main output of scholarly research is published articles in peer-reviewed journals. Peer review is essential because it prevents incomplete or shoddy work from being accepted as scientific fact. The peer reviewers however don’t get any recognition or compensation for the work they do, and there is no standard system for rating the quality of their reviews. Finding the right reviewers for an article can be difficult too, and managing the review process is time consuming.
Publons solves these problems by augmenting the standard peer review process, improving reviewer selection, and giving authoritative credit to reviewers that they can use for career advancement. The net result is that the peer review process is shortened at the same time the quality of scientific output is increased. By turning peer review into a measurable research output, Publons provides a new lens through which the quality and significance of research, researchers, publications, and institutions can be evaluated and reported.
Publons was founded by Dr Andrew Preston and Daniel Johnston. After completing a Ph.D and post-doc work in solid-state physics, and publishing and peer reviewing a number of papers, Preston recognised the opportunity and started building the core of the Publons system. After being accepted into Lightning Lab Wellington 2013, Publons started building up its user base and inventory of journal articles. They now have over 50,000 users, 285,000 reviews, and thousands of journals in the system. Just over 1% of all reviews generated in 2015 globally were recorded by Publons.
Publons’ revenue model is based on fees collected from publishers to integrate into the platform, and charges to academic institutions and research funders who pay for access to tools that help them monitor and evaluate their research interests.
Preston moved to London mid-2015 to be closer to his main market – academic publishers. Much of the future growth of the company will be globally from the UK, while product development and operations remain in Wellington.
Publons recently closed a significant investment round for a small stake in the company by the fifth largest academic publisher in the world, SAGE. The investment will provide enough runway to last eighteen months or so as the company continues to expand its partnerships with publishers, grow its user community, and prove out the revenue model.