On this episode of the Scouting For Growth podcast, Sabine VdL talks to Yann Barbarroux, CEO and co-founder of OTONOMI, about himself, his successes and about the recent fundraising round of $3.4million he and his team raised in an uncertain market.

KEY TAKEAWAYS

• Around 2003 – the onset of the internet bubble in the tech industry – I redirected myself towards financial services. I moved to the US and got a job in 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 digital asset ramp-up that we encountered, I got involved with emerging tech, deep tech and blockchain within the Citi Ventures innovation arm and I got incubated as a startup within their innovation lab. I’m not the earliest adopter in 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 procedure 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 the CitiGroup ventures entity. While I was working there I also came across deals in InsureTech 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 first tranche of our seed round, it was pre-product, pre-revenue. This year we expected to struggle tremendously considering the circumstances: high inflation, 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 from 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 snow storm in Texas which was a 1 in 100 year event which has a lot of climate and weather components of parametric that ripples down into transportation. That created such a traumatic volatility in the market that it became visible that cargo players, freight, logistics, while being on 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) but 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 a number of VC teams virtually, but the mere fact that we actually went to this conference, hand shaking, having coffee, having in person chemistry actually created much more interest, and they sent us a terms sheet two weeks after. This was a tremendous difference from the previous two years during the pandemic.’
‘The Insurance sector is wanting to take the leap of faith now with a number of 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 a 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: yann@otonomi.ai

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 around the world 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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