NXT | GEN Business Models

NXT | GEN Business Models Lessons from the world of Unicorns Sabine VanderLinden CEO & Managing Partner

You can't connect the dots looking forward; you can only connect them looking “backwards. So, you have to trust that the dots will somehow connect in your future. You have to trust in something - your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life. ” Steve Jobs 2 2

What are Unicorns… and else? Unicorns are high growth ventures with a valuation of over $1Bn. Based on CB Insights a variant of Unicorns includes Decacorns, or companies valued at over $10 billion (e.g., Paytm, Grab) and Hectacorns, or companies valued at over $100 billion (e.g., Airbnb, Coinbase,Tesla). © Alchemy Crew Ltd 2021. All rights reserved 3

Where are Unicorns coming from? 5% 3% 2% U.K. South Korea Germany e.g., Toss e.g., Babylon, 60% Zego e.g., WeFox 1% USA 1% e.g., Bright Health France 2% 21% Japan e.g., Vestiaire Israel e.g., Geek+ Collective China e.g., Cybereason 4% e.g., SenseTime India e.g., Zomato 1% 1% Brazil Singapore e.g. Nubank e.g., Trax © Alchemy Crew Ltd 2021. All rights reserved 4

The Facts 5 years avg. post series A to become Avg. 9-12 new a Unicorn Unicorns created per month Est. 800 businesses over $1bn Received $150m to $210m investment Received funding from avg. before Unicorn status 18 investors to reach their 2019 Unicorn status was a key year for Unicorns © Alchemy Crew Ltd 2021. All rights reserved 5

It takes a total 7-10 years for a leading market player to achieve Unicorn status 200 9.6 10 180 173 177 9 160 7.8 8 8.2 140 7.4 7.5 130 7.4 7 s Nu n 120 6 r o 105 m c i 4.9 5.1 4.7 b n 100 95 5 e u r f o o 85 f r 4.5 y e 80 4.2 4 e b a m r Nu 60 3.4 3 s 40 2 20 1 0 0 2016 2017 2018 2019 2020 2021 Q1 # unicorns created Avg years to become a unicorn Avg years to become a unicorn post series A © Alchemy Crew Ltd 2021. All rights reserved 6

It takes a total 7-10 years for a leading market player to achieve Unicorn status Great Year 200 9.6 10 180 173 177 9 160 7.8 8 8.2 140 7.4 7.5 130 7.4 7 s Nu n 120 6 r o 105 m c i 4.9 5.1 4.7 b n 100 95 5 e u r f o o 85 f r 4.5 y e 80 4.2 4 e b a m r Nu 60 3.4 3 s 40 2 20 1 0 0 2016 2017 2018 2019 2020 2021 Q1 # unicorns created Avg years to become a unicorn Avg years to become a unicorn post series A © Alchemy Crew Ltd 2021. All rights reserved 7

New economy -> Top 10 most funded business models Genomic, cell therapy (e.g., Indigo) Warehouse automation (e.g., Geek+) Electric & autonomous vehicles (e.g., Tesla) Gig economy and ride hailing (e.g., Grab, Uber) Cyber security (e.g., Darktrace, ID.me) Logistic marketplaces (e.g., Lalamove) Payment and wallets (e.g., Grab, Stripe) Residential real-estate (e.g., side, Pacaso) Online groceries (e.g., Instacart, SayWee) Online trading platforms (e.g., Robinhood) © Alchemy Crew Ltd 2021. All rights reserved 8

# of new Unicorns spiked last month! 39 Monthly incremental change 20 20 15 11 12 11 8 8 5 5 4 4 4 3 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 © Alchemy Crew Ltd 2021. All rights reserved 9

# of new Unicorns spiked last month! 39 Monthly Is it all because of recent incremental change accelerated digitization trends? 20 20 15 11 12 11 8 8 5 5 4 4 4 3 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 © Alchemy Crew Ltd 2021. All rights reserved 10

InsurTechs Example: 6 Unicorns that reached the new status last month Blockchain Coalition Klarna London (10 years) San Francisco (7 years) Stockholm (14 years) Crypto wallet service that visualize crypto Comprehensive cyber protection combining Online platform that personalizes exclusive currency transactions. Buy, Hold, Use Crypto. cyber, insurance and a digital platform. deals with multiple payment options. Raised: $490 M - $300 M series C Raised: $315 M - $175 M series D Raised: $2.6 BN - $1 BN series H Valuation: $5.2 BN Valuation: $1.75 BN Valuation: $31 BN Employees: 746 Employees: 178 Employees: 4k Focus areas: FinTech - Consumer Finance – Focus areas: InsurTech – Cyber – Enterprise Tech Focus areas: Retail – FinTech – Enterprise Tech Technology Infrastructure Starling Bank The Zebra Zego London (7 years) Austin (9 years) London (5 years) Multi-currency digital bank for consumers and Multi-product comparison site combining online Mobile first commercial motor insurance for businesses made available at one’s fingertips. and agent distribution across several US states. the self-employed drivers and fleet owners. Raised: $803 M - $445 M series D Raised: $262 M - $150 M series D Raised: $202 M - $150 M series C Valuation: $1.9 BN Valuation: $1 BN Valuation: $1.1 BN Employees: 817 Employees: 285 Employees: 253 Focus areas: FinTech – Digital Natives – Focus areas: InsurTech – Distribution – Multi-sided Focus areas: InsurTech – Auto eCommerce – Technology Infrastructure Marketplace Enterprise Tech © Alchemy Crew Ltd 2021. All rights reserved 11

Types of Unicorn business models 1 2 3 4 Tangible asset On-Demand service Advanced technology Marketplace & network builders providers architects orchestrators Build, develop and rent physical Hire individuals able to provide Develop, market and sell Combine the power of networks in assets to make, market, value-added services to intellectual property such as which participants share in the distribute and sell physical customers or charge for billable advanced technologies, value created from selling things. hours as-a-Service. software and analytical models. products, services & building commercial relationships. Example: Tesla, SpaceX, Example: Gojek, Ofo, Hopin, Example: Palantir, UiPath, Example: Coalition, The Zebra, Rivian, Juul Paytm, Grab, Careem Waymo, ID.me, SenseTime ShareChat, Zego Differentiation comes from combining unique business model characteristics and a variety of value-creation patterns able to yield long term competitive advantage. Many Unicorns now embed circular economy business characteristics to fulfil fast-moving sustainability requirements. © Alchemy Crew Ltd 2021. All rights reserved 12

What do they do well? 1 Narrow focus: They are doing a very few things extremely well. They develop one single centralized digital platform. And the business model becomes an integral part of the company’s success. 2 Hyper personalized, hyper localized. Still international: Use digitization to make the customer engagement processes leaner, better, cheaper and more stakeholder aligned. 3 Lead by serial entrepreneurs: Continuous change, adaptation, transformation and execution is part of the business DNA. Experienced leaders have often learnt from multiple iterations and business failures. 4 Workforce of the future: Unicorns always start small with very few employees before scaling their business model with digital and intangible assets. 5 Backed by astute financiers: Strategic investors provide key resources which allow them to create the pressure to perform and ensure the build of a successful and exit-able business. © Alchemy Crew Ltd 2021. All rights reserved 14

But not that simple… Example Insurance Finance Tech Auto § Friction-free & embedded: Emerging digital trends remove the existing boundaries from traditional siloed sectors and business models. § Underserved segments: Emerging customer segments are redefining new engagement models and how sectors overlap and re-bundle. © Alchemy Crew Ltd 2021. All rights reserved 15

But not that simple… Outperformers… Are often ecosystem-led value creators and network orchestrators that link their products or services to IoT to monitor, track and share as part of a series of engagements. Insurance Finance Able to achieve: Tech § 2 to 4 times higher valuation than their peers, compared with the revenue they generate § faster growth § larger profit margins by displacing costs through the ecosystems they built and partners they trust § higher returns on assets Auto Only 5 percent of companies globally. Why! § Gain strategic access to emerging technology and talent § Design new set of capabilities § Rely on intangible, digital and non-owned assets § Friction-free & embedded: Emerging digital trends remove the existing § Thrive through knowledge and strategic relationships. boundaries from traditional siloed sectors and business models. § Underserved segments: Emerging customer segments are redefining new engagement models and how sectors overlap and re-bundle. © Alchemy Crew Ltd 2021. All rights reserved 16

About Sabine: Sabine is a co-founder, CEO and Managing Partner of Alchemy Crew a venture validation studio using open innovation, ecosystem thinking and parallel experimentation techniques to accelerate the identification, validation and commercialization of new world products and services supported by game changing business models. Sabine was the CEO & co-founder of Startupbootcamp InsurTech (UK) & Hartford’s InsurTech Hub Accelerator (Hartford, CT, USA) where she worked with over 30 corporate insurers, accelerated in 70+ startup ventures, helping them raise over $100m in funding. She is a pioneer in building innovation ecosystems, a co-editor of bestseller The INSURTECH Book, a multi-award winner and a top #50InsurTech Influencer. She is an honorary senior visiting fellow on InsurTech Disruption at The Business School (Formerly CASS). Twitter: Sabine VdL LinkedIn: Sabine VanderLinden © © AAllcchheemmyy CCrreeww LLtdtd 20202121.. AAllll rriigghhtsts rreesseerrvveedd 17

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