On this episode of the Scouting For Growth podcast, Sabine VdL talks to Yann Barbarroux, CEO and co-founder of OTONOMI, an InsurTech startup dedicated to mitigate supply chain risk. Yann shares insights about himself, his successes, and the recent fundraising round of USD $ 3.4 million he and his team finalized during very uncertain times.

KEY TAKEAWAYS

• Around 2003 – the onset of the internet bubble in the tech industry – I redirected myself toward financial services. I moved to the US and got a job on Wall Street in New York, and I never left. I’ve spent my entire career in the capital market, risk management, and technology at several financial institutions and brokerage firms. From 2013-2020 I joined CitiGroup in downtown Manhattan doing risk management for structured credits and emerging markets, but more interestingly, in 2017, with the ramp-up of the digital asset era that we encountered, I got involved with emerging tech, deep tech, and blockchain within Citi Ventures' innovation arm and I got incubated as a startup within their innovation lab. I’m not the earliest adopter of blockchain, but 5-6 years of experience in this space feels like decades compared to other industries.
• Transitioning into entrepreneurship, what became very visible is a lot of the operations, pricing models, and pricing procedures and processes within financial services became very obsolete and very heavy-handed in terms of regulation, and there was a need for new, fresh products in the space. I was working on those items while I was in the innovation lab at CitiGroup ventures. While I was working there, I also came across deals in InsurTech and FinTech, which was very exciting for me. That’s where I came across the fascinating space of parametric insurance – the equivalent of financial derivatives or other binary products in financial markets but in the insurance space. What we bring with OTONOMI is a binary event contract for the supply chain space.
• We fund-raised in 2021 for our pre-seed or the first tranche of our seed round. This raise was pre-product, pre-revenue. This year we expected to struggle tremendously considering the market circumstances: rampant inflation trends, the political climate between Ukraine and Russia, and the East side of the globe. You would expect an early-stage startup would be struggling enormously for funding, but it turned out our fundraising campaign was more productive this year, and we managed to close it out in 3-4 months. £3.4million raised, and we’re very, very grateful for it.
• The starting point for us in 2021 was the rippling effect of the global supply chain breaking down. But for us, a few months beforehand, there were two events that were very critical and instrumental. The first was the snowstorm in Texas which was a 1 in 100-year event which has a lot of climate and weather components of parametric that ripple down into transportation. That created such traumatic volatility in the market that it became visible that cargo players, freight, and logistics while being at the forefront of trying to operate as fast as possible, were constrained with huge financial liabilities that they couldn’t recoup from any traditional insurance contract. The second event was a few weeks later in the Suez Canal. Everybody saw it and talked about it. Again, the supply chain couldn’t function properly, and insurance and financial contracts were not transparent enough to serve those players in due time. What was interesting for us was not just the parametric aspects but the binary delay of a potential delay/ interruption of supply chains (which we cover) and also the facilitation of operations and payments.

BEST MOMENTS

‘I’m a nerd at heart but a financial engineer by trade.’
‘The turning point for us was when we actually visited Austin, Texas, in person. We were in touch with several VC teams virtually, but the mere fact that we actually went to this conference, handshaking, having coffee, and having in-person chemistry actually created much more interest for our raise, and the VCs sent us a terms sheet two weeks after. This was a tremendous difference from the previous two years during the pandemic.’
‘The Insurance sector wants to take the leap of faith now with several projects in the space, us included.’
‘We believe that if we have the right infrastructure to collect premium, manage collateral and settle compensation payments within this very much ring-fenced and consistent infrastructure for digital payments, then essentially we can be creating very streamlined processes.’

ABOUT THE GUEST

Yann Barbarroux is CEO and co-founder of OTONOMI, an InsurTech focused on transforming the transportation and cargo insurance industry. He was born and raised in Marseille (France), went to grad school (graduated with an MS in Computer Engineering) in Paris, found his first job in Wall Street back in 2003, and never left NY.

He wants OTONOMI to become the one-stop-shop operating layer for parametric insurance policies (data-activated insurance smart contracts), with applications in air freight, marine, trucking, weather, and device coverage. First and foremost, alleviating the customer’s pain points of going through the lengthy claim adjudication process: OTONOMI compresses resolution time from 45 days to 45 minutes.

OTONOMI aims to be the de facto “detect, active, and pay” infrastructure InsurTech for all data sources that can be used to create parametric products: database server APIs, logistics analytics, and IoT sensors. For that, it works with data partners such as Chainlink, which provides security and integrity to its event triggers.

Website: https://www.otonomi.ai/

Email: [email protected]

ABOUT THE HOST

Sabine is a corporate strategist turned entrepreneur. She is the CEO and Managing Partner of Alchemy Crew, a venture lab that accelerates the curation, validation, and commercialization of new tech business models. Sabine is renowned within the insurance sector for building some of the most renowned tech startup accelerators worldwide, working with over 30 corporate insurers, and accelerating over 100 startup ventures. Sabine is the co-editor of the bestseller The INSURTECH Book, a top 50 Women in Tech, a FinTech and InsurTech Influencer, an investor & multi-award winner.

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