We at Gemba Capital met Abhishek and Saurabh at our office on 9th October 2019. It was a long meeting, but one of those where you appreciate the clarity of thought, the founders had on Day 0. First step to get such clarity of thought is when you clearly identify and define the problem statement, which they had.
In terms of the market size, growth and timing, it was in-line with our internal thesis on the Insurtech space in India. We felt it is one of the least disrupted sectors in India where incumbents are lagging behind in terms of innovation, are still on legacy systems and do not have a ‘product-first’ approach. Initially, we thought that the market size is too small, but digging deeper we realized how the market will evolve, adjacent markets will eventually open up and great founders increase the TAM itself !!
Since it was a pre-product company, our call relied mostly on Founder Market Fit. So now, our job was to evaluate whether the team can build it.
To quote a para on the founders from our internal investment memo:
“They both bring complementary skill sets on the table. They have worked in US markets, in large organizations, funded startups, failed startups, SaaS companies, have been entrepreneurs themselves and bring with them a strong network of relationships to build the team and get to early customers. They being an outsider to the insurance company could indeed be an advantageous position, to think from first principles, to question the standard market practice, and to create a disruptive product.”
We were sure that we were backing a strong team in a large and growing market. The GTM strategy and B2B2C approach made sense to us. In terms of valuation, it was outside of our comfort zone, but we knew that quality founders always raise at (seemingly high) valuations and one can still get non-linear exponential returns if you are backing Delta 4 product (as Kunal Shah terms it). Opportunities in Insurtech space in 2019 were not many and that too in a category creating startup with strong founders and lead investor.
We are glad we took the call to invest.
Plum has grown significantly post the investment. But what is important is the quality of growth — what sets it apart is the ‘love’ it gets from its customers — the low churn rates, high NPS scores and the quality of people willing to join and hired. This results in building ‘trust’ faster, which is very critical for any insurance business. The culture (comes top down from the founders) sets it apart.
We truly feel, that in such a short period of time, Plum has built a strong ‘brand’ and a fantastic product. We invested in the pre-seed round and continue to back them in the seed round and now in the Series A round.
Onwards and upwards !