The Secrets for a Successful Relationship Between a Large Group and a Startup
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Partnerships can prove incredibly fruitful for both insurtechs and incumbents as both look to grow and consolidate their market share. Pascal Bied-Charreton, CEO of Moonshot-Internet, a startup who have benefited from a special form of partnership, explained the different ways to achieve partnership success.
In Europe, the startup ecosystem is experiencing a significant dynamism. Meanwhile, large companies are becoming increasingly aware of the need to develop their innovation processes and to adopt new organizational business models. To do so, large corporations are multiplying initiatives to bring together startups as part of open innovation strategies and even on-site incubation – to combine the best of both worlds : agility and resilience.
Why is it a mutually beneficial relationship?
Agility needs two things: dynamic capability and a stable foundation and resilience.
The growth capacity of a start-up is strongly correlated with the “ecosystem” in which it is immersed, it means the fabric of actors and structures with which it interacts. Large companies are part of these fundamental players. They can be for startups : clients, investors, buyers, partners, distributors as well as incubators. The open innovation strategy promotes common development and the interconnection between large companies and startups gives rise to benefits for both players.
Proof of this mutual attraction, in 2019, according to Sifted, $4.8bn in venture capital funding was raised by French startups, up nearly threefold since 2015 and France has become one of the hottest tech hubs in Europe.
The limited partner: Thousands of companies have invested in venture capital funds as a sponsor. It is a low-risk initiative but whose impact on the company is often limited to a few contacts in contact with startups.
The corporate venture: Thousands of companies around the world have opened investment funds in startups. This initiative is relatively quick to launch fintech startups in their ecosystem. It generates collaboration opportunities and creates a platform for startups looking for a point of contact to propose innovations to the company. But they have not always found the instructions to manage failures in their portfolio and the startups that are having difficulty in taking off.
Start-up incubators: On the model of these French groups, the Plateau of Societe Generale or the Village by CA of Crédit Agricole – some companies welcome startups in attractive places to encourage innovation. Nevertheless, startups generally come from very diverse fields, and without necessarily having a relationship with the large corporation that manages the incubator.
Société Générale has successfully transformed the trial with a large intrapreneurship program called Internal Startup Call. Moonshot-internet was the first component of the innovation program launched the same year.
Moonshot-Internet backed by Societe Generale Assurances proved its capacity to deliver even in the face of a COVID-19 crisis – and anchors this hybrid model as the solution to the further relationships between startups and big companies. Fragile during the first years of their existence, startups often need support – whether financial, commercial or in terms of expertise to pass the five-year mark. For a startup, being in the ecosystem of a large group first brings credibility and visibility, but can also provide security and compliance about legal issues, or even the possibility of accessing customers and business partners with an international footprint. Expert advice coming from the incumbent group to the internally incubated startup ensures a coherent evolution for all.
Intrapreneurial projects incubated within a big corporation is a possible business model in the insurtech industry and a good illustration of the adaptation to the deep transformations in the financial sector notably. This hybrid model combines the entrepreneurial vision of startups internally and confirms that fostering a corporate culture of innovation and interaction can be done both within and outside the organization.
Startups usually adopt lean techniques: they try, fail, learn and start again. Being part of an innovation project side by side with a resilient large company can be a key element for their development and their stability.
CEO of Moonshot-Internet since September 2019, Pascal Bied-Charreton was a former member of the executive committee in charge of international of Societe Generale Assurance.
Moonshot-Internet, the French InsurTech specialist in affinity insurance, offers e-merchants, mobility, and financial services providers an insurance-as-a-service solution. Its product range is based on an API architecture for rapid white-label deployment with its customers and partners, with a 100% digital customer experience, from underwriting to claim notification.
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