While we were very impressed by the founders from the very beginning, what they have been able to achieve in such a short time, and in the current market, is truly exceptional.
To dive deeper into how everything has played out, Linus Dahg, Partner at Inventure sat down with Hedda Båverud Olsson, CEO of Lassie, to talk about their journey so far. Here’s their conversation:
Linus Dahg, Partner at Inventure: Great that we can have this chat, Hedda! I know it’s been an interesting last couple of weeks after you announced your €23 million B round with Balderton.
That’s 2.5 years after your Seed, it’s amazing progress. How does it feel to achieve this milestone?
Hedda Båverud Olsson, Lassie Cofounder and CEO: You know, I think it’s very good to take a step back because I’m very results-oriented. If you take a step back, you realise: Okay, this has actually been quite a success. Because you quite often start thinking about the next country, the next funding round… you become very quickly oriented towards the next goal, which I also think is very good! I think we wouldn’t have grown this fast if I wouldn’t have been this result oriented.
But looking back, we have actually achieved a lot. We are a different company than we were two and a half years ago, even if there’s still a lot left to do. So it’s good celebrate with the team and then move on and go to the next goals, because the journey doesn’t stop here.
Take your time to find your core team
Linus: We’re obviously going to talk a lot more about what you’re going to achieve in the future. But if we start by taking a couple of steps back, how did Lassie get started?
Hedda: Yeah, so the story is that I had the original idea for Lassie. I worked first a couple of years at McKinsey and then EQT, and it felt like I was getting a little bit too far away from where I felt the magic was happening. My mom was a vet. So that’s how I got the idea for Lassie, and that I wanted to aid and digitalize pet insurance.
I didn’t have any cofounders to do it with, but I was very passionate about the idea. So I started asking around in the industry, like who’s the most innovative person in pet insurance or who’s the best engineer that I could do this with.
But that was actually maybe the most difficult part, or the part that took the longest. You know, it probably took me six months to find the right cofounders. And I’m really glad that I kind of held off and waited for the perfect match because looking back, if I would have gone with any other developers or the other insurance people that didn’t really know pet, I don’t think Lassie would have become what it is.
But first, Sophie [Wilkinson] came from recommendations — she had been head of pet insurance at If, one of the largest insurance companies in the Nordics. She had just left because she was sick of how slow everything was going.
And Johan Jönsson, our CTO, had been involved in a few startups before, but nothing really took off. He just went back to consulting, but he was at Spotify, and had previously been at King as a full-stack developer. The week when we first time got in contact, he was also picking up his first puppy. So it was very much a “stars aligning” scenario there.
Seed: Go consumer centric and win the users
Linus: We joined you in May 2021 by leading your seed round right before your launch in Sweden. Let’s walk through a little bit of your initial launch plan — what was a success, and how did growth pan out compared to what you had envisioned?
Hedda: Trying to think back, I think one of the most successful bits was that already from the start, our users really loved the product. That gave us a head start with amazing customer feedback, and were able to get ranked very high on these official recommendation sites. So we got a warm welcome from not only the community of pet parents, but also from industry professionals that cared more about our terms of conditions. I think that went really easy.
Then, I think what we spent a lot of time working on in the beginning was that none of us had a specific marketing background. So that was what we really had to focus on, and I think that fell on me to actually like learn how much to do branding versus growth.
And, you know, we went through multiple agencies and tested many things before finding the right fit. We weren’t pros at marketing in the beginning, but we had a product that customers really loved and that took us really far.
I think that took us to series A, but then after series A we really started to perfect our marketing game and we more than halved our CAC. But that’s really been a learning curve.
Go big (Germany) instead of thinking gradually (smaller markets)
Linus: Then you raised round A on the back of a fantastic start in Sweden. I remember us sitting and working on the decks together on which markets to focus on, or even to think- how do we make that decision? You obviously chose Germany, one of those historically complicated markets to crack from the outside, compared to some smaller markets that you were considering. How did you come around to make the decision on Germany?
Hedda: I think, you know, for us, we felt like we are all-in. No one’s going to remember someone who did something halfway. So we really went for that big market and put all of the focus there instead of spreading ourselves too thin.
So, we had one big goal after the A round which was to crack Germany. And so we were just like okay, we just have to move there if needed. If you want to crack something, you will. It just will take time. You just have to be stubborn and have the drive to do it. And that’s easier if you pick one market than several, obviously.
Adapt to a new market with better unit economics — deliberate choices that long-term lead to higher efficiencies
Linus: Looking back now, Germany has been fantastic. You’ve grown about 8x from series A to series B, which is obviously unbelievably good. What’s been the key things in your view on why you made Germany work?
Hedda: I think the high level answer is just that we had to make it work. We had really good people joining the German team who believed in it as much as we did. We also made a lot of tweaks in the beginning as the markets and the culture are not exactly the same. That meant everything from looking at the sign up, to looking at the marketing funnel, to the communication with customers.
I think we also have a huge advantage of having a direct access to our customers with a customer success chat open every day from 8 to 10 o’clock in the evening. So therefore we got a lot of feedback on what they understand, what they don’t understand, what they like, which we then can, of course, develop further and make sure that we tweak it.
And to be completely honest, the first two, three months were okay-ish. Then it really kind of took off and just went so quick, we didn’t really almost have time to keep up with it. And I think the learning with Germany is that it’s a lot about creating trust. Swedes are maybe a little bit more poised to test something new, but in Germany, the more reviews we had, the more people talked about us, then it just started snowballing. So it was all about getting that good start and finding those superusers and then helping them, or getting them to spread the message.
It’s also been really good for us that we first cracked the most mature market there is for pet insurance, which is Sweden. So wherever we go now, we just are 10x all the competitors, because if you can win in a market like Sweden, you will be just 10x all competitors in all other markets. So I think that’s also been a huge benefit for us.
The €23 million Series B
Linus: And now, in this macro climate, as a consumer facing company, which is not exactly the flavor of the month or flavor of last year, you managed to raise this very important series B round from Balderton. What are the plans now? How are you gonna grow even faster? How are you gonna take on the next market?
Hedda: Yeah, so obviously, we had very good success with Germany. So definitely looking forward to do some country expansions in 2024.
And we’re also really looking forward to continue expanding on the ecosystem. The reason why we have such strong organic intake is because pet parents use the app for more than pet insurance, they are doing the courses, quizzes and videos, and collecting points in the app for rewards. So I’m really looking to expand on that because that’s really how we can win against everyone else.
Obviously, if you have more organic intake and better LTV, you’re more competitive.
Not growth at all costs. But smart growth
…Another thing is to continue being capital efficient. We’re only 30 people so far, and looking at some of the competitors, we have half the headcount of companies in our revenue size. We’ve done a lot of optimization on claims and payouts. I think that’s been core on being capital efficient, and I think that’s really important nowadays.
Linus: Yeah, exactly. I was just going to touch on that. What are the most important choices you’ve made from that perspective?
Hedda: Yeah, so a lot of things. What I’m really proud of is that we’ve been really successful on insourcing a lot of things. In the beginning we had growth outsourced and our claims were outsourced. But when we insourced them, we realized that there’s a lot of potential there to improve. For example, as soon as we insourced claims, we were like, okay, this process doesn’t need to take this long. So really deliberately insourcing things has both improved our economics, but also made us more efficient.
I also think we’ve been quite good at acting pretty quickly, when we’ve seen that things aren’t working. Like, okay, Germany isn’t flying, what can we do? Or, you know, outsourced growth doesn’t lead to better CAC over time, should we insource? We’ve been pretty fast at actually making those decisions. My learning is that if you start feeling something is a problem, it won’t go away. It’s better to just rip off the band-aid.
For us, I think it’s been good that the macro has been a bit worse now, because we were like, okay, how can we be more efficient? Like that kind of pushed us also to improve even further. I think we already had some of those traits going on for us as a small efficient team, but it really pushed us to optimize our cross-margins or customer acquisition costs further, because we felt that there was a shift in the market.
Know which metrics matter
Linus: Okay, final question. Are there any key learnings or principles that you think have been key to your success that haven’t been mentioned?
Hedda: Yeah, I think I already mentioned most of them. But I think knowing what metrics are most important to your company, whether you want to optimize for fundraising or optimize for profitability is really important.
Figure out three high level metrics that everyone in a company knows that you’re going for. And then, you know, you have a hundred-day plan and everything ties into those, you know, grow in Germany or whatever it is. So it’s super clear for your team that if you’re prioritized between two different things, you know what the company wants. And then you should spend eighty percent of your time on reaching those metrics and the other 20 percent on other hygiene factors. So you don’t start projects that don’t lead to those metrics. Be really clear on where you want to go and how fast you want to go there.
Linus: Perfect. Thanks a million for taking the time, Hedda.
