This interview is part of Scaling Enterprise FinTech | The Handbook, launched in Mar. 2021 in partnership with SixThirty Ventures and Finovate Europe. The Handbook includes proprietary research on ca. 65 Enterprise FinTech scaleups in Europe, Q&As with 16 founders on their journey to scale, as well as insights from 10 leading investors and financial institutions. Whether you are a founder with an idea, an early stage startup looking for inspiration and learnings, or an investor or financial institution looking to understand the difficult but rewarding journey to building a world-class Enterprise FinTech firm – download the Handbook here http://www.fintechforum.de/sef/
1. Tell us a bit about yourself and your company.
My name is Christopher Oster and I am the founder and CEO of CLARK, a leading digital insurance manager. Our CLARK app makes it easier, simpler, and faster for consumers to manage their insurances – all in one central app where changes can be done with just a few clicks. Additionally, insurance experts are available for an in-depth consultation via in-app chat, mail, or phone. Since CLARK’s founding in 2015, we have served over 300,000 satisfied customers. More than 250 employees from over 40 nations work from our offices in Berlin, Frankfurt, Vienna, and Püttlingen. Before founding CLARK, I was COO of the vacation rental marketplace Wimdu and led its operations and international expansion. I also spent several years with the Boston Consulting Group as a consultant for companies in the financial sector.
2. Give us the backstory- how did you get the founding idea, and how did the first sale come about?
There are always two things that need to come together for a successful company founding: A passion and a market. When I founded CLARK, I was completely lost with my personal insurance situation and felt that I needed to take care of it. But there was no place to do that properly online. After talking to more and more friends, I realized: this is a problem for many people. To be more precise: studies show 75% of consumers are not satisfied with their insurance experience. And that makes a market.
Now for the passion, I have always been excited about the digitalization of traditional markets, e. g. my work at Wimdu. And the driving force for CLARK has always been that “significant things in life should be easy”. So, creating CLARK and helping it grow and prosper into the forward-thinking company it is, has been a great experience all around. I’m not going to lie though: Our first 100 customers definitely all were family and friends. But our idea quickly resonated with more and more people and we now serve more than 300.000 customers in Germany and Austria.
3. Could you summarize your journey to scale from a sales, go-to-market and business development perspective, perhaps split into 2-3 key phases?
Scaling sales: Starting from 300 customers at the end of 2015 we scaled up to a customer base with over 300.000 CLARK users in only five years, who are all managing their insurances, compare current products and buy new ones via CLARK.
Go-to-market: After a late and highly competitive market-entry in 2015, we managed to hold up against the other players and became the leading digital insurance manager in Germany. In the midst of a world-wide pandemic, we also expanded into our first foreign market: Austria.
Business development: From what was, after all, a very technology-driven app, CLARK as a company has evolved into a digital lifestyle brand in the last years. Today we have more than 250 employees and are on our way to becoming the leading digital insurance broker in Europe.
4. Which was the most challenging phase, and what would you have done differently?
When we entered the insurtech market rather late in 2015 we had some strong competitors in Germany like Knip or getsafe, which challenged our start. But while the competition was focused on providing a digital folder for insurance, we focused on getting our customers better insured and gave them a place where they get actual support for their insurance needs. That’s how we managed to get ahead of our competition.
After two years we realized that banks were interested in our product and started a white label business, which shifted our strategic focus to these business partners. In retrospect, this took us off course – so today, we are fully concentrating on our customers who use the CLARK app. This was something, I would have done differently.
5. When did you decide to expand to the international/ US market, and how?
We decided to enter the Austrian market, our first expansion market, at the end of 2019 and realized the market entry in March 2020. This market was especially promising for us because Austrian consumers have an average of 6.1 insurance contracts and pay around 2,000 euros in insurance premiums every year. In addition, the Austrian insurance industry similarly to Germany has largely neglected digital insurance experiences thus far, so it was the perfect setting for CLARK to address new digital customer needs.
6. When did you first decide to raise venture capital, and what has been your approach to financing growth over the years?
For the first major round of financing in 2015, we approached 300 investors beforehand and got up to ten rejections every day. Once we found investors who believed in CLARK and our business model we kept in contact and increased the number of shareholders over the years. To keep growing in the future we successfully got investors like Tencent on board, who helped us complement our existing shareholders and give us insight into the Chinese tech landscape.
7. How is building an Enterprise FinTech firm different from a “regular” SaaS / Enterprise Tech company, and what three things should founders get right?
Financial Services is one of the most regulated markets. As a FinTech providing software in the field, you need to fulfill the highest standards and meet the regulatory requirements of your software customers. Therefore, as a young startup, you may need to fulfill the regulatory requirements of an insurance company. This has to be incorporated into your planning from the get-go, especially when you think about resources, such as capital requirements and of course human resources like having the right kind of support from lawyers and regulatory experts.
I believe founders need to get these three things right: First, the Product-Market Fit. most founders don’t take enough time to evaluate the market they are getting into and just focus on their product. The second is the founder’s team constellation. You can’t do everything, so make sure each founding member brings in their own expertise and complement one another. The last one is ”Think Big” – in order to survive out there your processes should be scaleable. Investing the time to find a scalable business model will pay off in the long run and especially in times of growth.
8. What’s on the priority list for you and your team for the next year?
Definitely further raising our brand awareness in our home market Germany. As of right now, around 15 percent of Germans know CLARK, which in general is a great result after just five years and especially for the insurance branch. But we want to raise that to 40 percent to really be at the forefront of consumers’ minds when they think about insurance. This is why we try new and innovative Marketing strategies that lower people’s resistance to deal with their insurance situation – because CLARK is at their side.
9. Where is the financial services sector headed in the next 12-18 months, and what should we be watching out for?
I think a part of the sector still needs to recover from COVID-19’s impact. Besides that, we will see the ongoing digitalization of payment, banking, and trading services through Fintech companies like Klarna, N26, and Revolut. Disruptive innovations will keep reshaping the financial services landscape and put more pressure on the traditional banking sector for transformation and investment in technology. And I believe that the central role of customer data will gain further importance and help develop cheaper, better services and increase customer satisfaction.
10.Your favorite place(s) for a meal, coffee or drink (pre-COVID19)?
My favorite place to have a coffee is in the lounge chair in our living room at home. That is where I can focus and concentrate best. And of course, our CLARK office, as it is where I can connect with other CLARKees and enjoy time with them over lunch or an after-work drink.