Identity verification startup Nect, an early InsurTech Hub Munich alumnus, recently disclosed cooperations with a handful of insurance companies. Founders Benny and Carlo believe that their key to success is being tenacious.
It’s not even four years ago that two guys in their late twenties, Benny Bennet Jürgens and Carlo Ulbrich, were pushing strollers in the beautiful northern German metropole of Hamburg. Both had become fathers recently – a phase in life when many people would opt for a maximum in stability and secureness. Not so Benny and Carlo: During their walks along the Alster river shore they discussed quitting their jobs and starting a company of their own. And they did so successfully: Today their startup Nect has 20 employees and a customer list spotting the names of more than a handful of insurance companies such as ITHM partners HUK-Coburg and Nürnberger Versicherung. Nect’s identity verification solution is offered to 30 million insurance customers in Germany at present.
From day one, they covered both the tech and the sales side of their business. A longtime IT specialist at major insurance company Generali, Benny brought in plenty of experience building portals and apps for customers as well as brokers. Carlo hails from the seaport of Bremen as ex-head of sales in a shipping company. He knew exactly how to get the insurers listen to their concept – AI- and machine learning-based identity verification for customers onboarding – whilst Benny understood the inner workings of insurance companies. “You have to be really tenacious and the same time allow for extensive decision-making time”, he says. “If you expect to have only one meeting and pilot right away, you’re in the wrong industry”. Carlo seconds: “Being a startup is not only about inventing, it is as much a people’s job. If you succeed or not lies in the hands of a limited group of people, even in the biggest of companies – so it’s a question of the how well you manage your relationships”.
The chicken-egg dilemma every startup faces
Perseverance not only extends to keeping up the spirit – but also to a startup’s financial stamina, as explains Carlo: “In the beginning, it is an absurd chicken-egg dilemma. Without any customers in tow, it is difficult to find venture capital support. While at the same time prospective corporate partners are hesitant to work with you without any VC backing”. Nect successfully scored funding from the city of Hamburg in 2017 and investment by Dieter von Holtzbrinck (DvH) Ventures the year after. Still it is also important to know when to hold back, as Benny remarks. They were courageous enough to turn down an offer by an insurance corporate venture arm: “We believe that for a service such as identity verification venture capital needs to come from a neutral party, outside the industry – otherwise competing insurance companies would shy away from cooperating with us”.
An important step in the early days of Nect was their journey in InsurTech Hub Munich’s (ITHM) first accelerator batch. “Access to the network allowed us to get a foot in the door of some of the partners we work with today.”, Benny retells. “This has been the kick-start for our company and might even be the reason for winning awards and attracting investors.” Carlo reports: “For me, the accelerator provided a crash course in understanding insurance. And I’m not only talking about the specialized knowledge but the way insurance managers think”. “At first we arrived in shorts and sneakers, whilst the corporates would wear a suit and tie. I think over time we met in the middle”, he adds, smiling.
Both entrepreneurs are heavily committed to maintaining their network – “alumni meetings or events like demo days are precious” – and on staying the central contact for their corporate partners as long as possible: “We have a tremendous amount of expertise in our staff, we can’t be any more proud of our team. Still, we believe that the founders have to remain in the role of ‘secretaries of state’.”
Next up: Banking?
What’s next? “Banking is the holy grail of anybody involved in identity”, explains Benny. “We’re already working in health insurance, which is highly regulated terrain – so the logical next step would be to enter the FinTech scene”. “Everybody hates GDPR – we just love it”, says Carlo tongue-in-cheek and explains: “As a young company we’ve grown up with the new regulations and didn’t need to adjust existing processes to this situation. This topic was priority for us from the beginning”.
Not long ago he and Benny have become fathers for a second time. Would they recommend being founders and parents? “It isn’t easy for our partners whom we confront with brimful and ever-changing calendars”, they both admit. Carlo comments: “But having kids also gives you the power to stick to your goals with full commitment. Giving up wouldn’t be a good example, right?”