Raphael Vullierme is the cofounder and CEO of Luko which is a neo-insurance company that provides home insurance and security technology. The company has raised over $70 million from top tier investors such as Accel, Founders Fund, Kima Ventures, and Orange Ventures to name a few.
In this episode, you will learn:
- How Luko is changing the way we manage and insure our homes
- Raphael’s top advice for other entrepreneurs
- What to look for in VC investors
For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
The Ultimate Guide To Pitch Decks
Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
About Raphael Vullierme:
Raphael, cofounder and Luko’s CEO. He started Luko with Benoit Bourdel, specialist in deep learning and smart energy networks, to protect millions of European homes.
Raphael is a serial tech european entrepreneur: former OpenJet.com CEO a SAAS enable marketplace for Business Aviation (Paris & New York). Former Rocket Internet GVD & Foodtech founder: eatfirst.com (Berlin). Educational: Industrial Engineer & HEC Paris Graduate (Master in Entrepreneurship)
Connect with Raphael Vullierme:
* * *
FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today, we have a founder from Europe, so it’s going to feel like being at home, again, which is great. I think this founder has gone through the ups, the downs, the highs. Now, he’s killing it with his recent successful company, and I think that we’re going to be learning quite a bit. So, without further ado, let me welcome our guest today. Raphaël Vullierme, welcome to the show.
Raphaël Vullierme: Thanks, Alejandro, for having me.
Alejandro: So, originally born in the French Alps. I’m sure that you did a lot of skiing, so that was probably a very fun upbringing.
Raphaël Vullierme: Exactly. I was in high school. I was going in the morning to school and then to ski, so it was very good early days.
Alejandro: That’s amazing. What was it like? Did you have anyone in the family that was into engineering, into maybe computers, or into entrepreneurship? Tell us how that seed was planted early on.
Raphaël Vullierme: It’s interesting because all of my parents and brother were state workers, so very risk-averse job, and kind of entrepreneur, but my two grandparents were entrepreneurs in their way. One was a farmer, and I would get very close to him, and he was a super entrepreneur in farming and buying the first tractor or things like this. I think he’s being very close to [2:46]. I got the passion and the mission to build something on my own.
Alejandro: What about in terms of solving problems because you ended up studying industrial engineering, so you were into taking a look at problems and figuring out how to solve them.
Raphaël Vullierme: I’m an engineer first, and I always had that engineering mindset. I learned quite early in my engineering study. I was actually quite good at coding, but I didn’t really like it. I think it was too much rigor. The crazy part was 10%, and the building was 90% because I was a very bad developer. But that was my first touch with the technology world. Actually, after five or six years, I was not into startups and not into technology, and I came back to a startup and technology after my first internship, and I was much more settled in a major company.
Alejandro: Let’s talk about that because you did a few internships in places like Cartier. You even worked at places like Accenture. I think this was definitely the segue to help you understand that what you wanted to do was to build your own business. How was that transition, and what was that moment when you encounter “This industry is exciting, and I want to go into it, and I want to build something.”?
Raphaël Vullierme: I’ve always been a bit attracted by entrepreneurship, but I didn’t grow up saying, “This is what I’m going to do with my life, so I’m sure this is it.” So, like a lot of people, I was trying to figure out what to do with my life and what was my interest. My first internship was with Accenture in a mission for AXA rolling out SAP, so a huge IT software and a huge company, something that took them four years with 200 [4:39]. I actually hated it. Not much consistent lifestyle was okay for me, but the topics were incredibly boring. I was super, super complex, but you see in me like zero one person of what you’re working on. And insurance was super [4:58], super platform, anything you could understand from the consumer. After that first work experience, I promised myself that I would never again work in insurance and never work again in rigor IT projects. I cannot really find the working world super boring, and I think this is definitely what led me to find something much more exciting and more driven by passion and by meaning. Cartier was an internship experience. I learned to work with passionate people about gemstones and true expression of their own world. But at the end, the thing was to start my own company. Actually, I had the choice to join L’Oréal, which is probably the best company that’s every French guy’s dream to join when he grows up if it’s not joining [5:49], more or less, it’s like joining L’Oréal, and it’s one of the best companies in France. I had a job there, and I decided to go for an internship [6:00]. It’s nothing very courageous, but that’s definitely the tipping point that led me to start working on building my own thing.
Alejandro: So, Goodfood was definitely your own thing. That didn’t last so long. That was eight months, but it was definitely eight months full of lessons learned that we’re going to be talking about in a little bit. What happened during those eight months, and why was it such a short stint?
Raphaël Vullierme: Goodfood was my first to build something and get from just an idea to a true business. I was still a student at the business school when I started working on it. The rationale was quite simple. With the internet, you can change the menu of your restaurant every day. At that time in Europe, you could only basically order pizza and sushi. I thought, people want to eat something else than pizza and sushi in their home. There were no deliveries, no Grub Hub, and things like this. There was no delivery company. We started working on this. It’s tough because my co-founder, our goal at that time was to do a vertically-integrated food delivery. So, you manage a kitchen; you manage a delivery guy; you manage the recipe. You integrate everything. [7:20]. It’s a super [7:24] model. I was 22 and was working nights and weekends on managing the kitchen, porter, and managing the delivery driver and everything. My co-founder decided to stop because there were two interns. It was not a hot stop. I cannot do it on my own. I also need [7:44]. I heard about Rocket Internet working on the same business, actually working on the same American startup and replicating into Europe. I said, “Okay. I [7:57] and learn with much more capital and much more efficiency.” In one year, first on my own, and then with Rocket Internet [8:10 – 8:13] 150 people working on that idea and burning a million a month. So, it was super frustrated learning a startup creation and execution.
Alejandro: It was even all about learning German, too, because you moved there. You were 22 to Berlin, and you didn’t speak anything, and you went right away to hiring. I’m sure that was pretty cool for you.
Raphaël Vullierme: Yeah. That company in the early days, we were three or four. My first step was to get it up and running. I got kitchen staff, get a driver. I didn’t speak German well, and so I had to hire a bunch of guys, [8:50], without speaking any one of their languages, and they were not speaking English. That was the fifth year. It was a very interesting experience and [9:01], but I was still young, and it was a lot of responsibility and learning in this stage too. That experience was a super-fast-track to an entrepreneurial life.
Alejandro: In this case, you learned a few things. One was thinking long-term, and another one was investing in people. How did you come across those two lessons?
Raphaël Vullierme: Working at Rocket Internet is famous in Europe. [9:32] was to copy a U.S. model outside the U.S., first in the original company. So there was a team of the copycats. That’s what the deal was to hire [9:44] McKinsey or Goldman guy gives them three to five-person ownership in the company, give them some tasks, a lot of pressure, [9:53]. But in your early days, in a company, you need to prove your market feed, find your model or your product, and so on. It doesn’t work. It works with creativity and works passion as well because your life depends on it, but not your job – like your true life, and it works because you want to have an incredibly high upside. And if you don’t try the good time and interest if you don’t create a great future. You can have the smartest guy. You can have a crazy amount of money. It just doesn’t work. Rocket Internet was my first work environment. Then it was also the first time I saw that one future leads to nothing. [10:41], but I think the right mindset and the right future, and the right reward and the element of interest and he was to get super-smart engagement and successful.
Alejandro: Culture – that was a big one here. What turned you off around culture that prompted your departure?
Raphaël Vullierme: I was learning, and when you’re very young, you don’t tell. You learn, and you go after. I left, this time because of future, but I spent a year, so it was kind of a short time. I left also because the business was not great, and I saw it firsthand that this business was doomed to fail, so I left. I took [11:27] company. In that was a company, and we discussed it, but I also made a lot of mistakes as you see all around hiring future, treating people probably fairly and so on, and this is still the longer-term impact of a bad decision, or bad early decisions of the last company I built, which was Luko, you want to do everything right. You want to think long-term and align bridge after bridge, especially people-bridges. Once you’ve been unfair to someone, or when you are compromising and delivering to someone, the trust you’ve lost is impossible to recover. Of course, when you’re very young, you do all these kinds of things and it’s good that you’re learning. But I learned super-fast that you need to be super long-term businesswise, but also with people. You need to choose people you want to work with for the next ten years of your life and treat them like you’re going to work with them ten years of your life with them and be incredibly fair and earnest and loyal to them. This is also what makes you happy on a day-to-day basis. Work with people; you’re really close; work with people you trust, and this goes both ways.
Alejandro: Here, you don’t see a future for yourself, and you decide that it’s time to go. You were doing food delivery, and it was a crowded market. Everyone and their mother were thinking about this. So, from operating a very crowded space, what did you learn?
Raphaël Vullierme: It was very early days of the crowded space. It was before [13:14] at that time, so it was really delivery. I was probably one of the first 15 guys working on a new-generation food delivery in Europe. So, the beginning of the wave, I’ve been telling some people; a really great company failing. One is called Tech Daily – the best in best product everything, but they were too nice and too soft on fundraising, and so basically, one of the things I learned was the speed of execution and access to capital is incredibly critical, especially in big consumer markets. Of course, our focus was not really bad positioning to this, but what was missing at market was market future, and the company model was not right. I’ve seen delivery getting from nothing to a huge success and also going down. The speed of the execution [14:17] execution on access to capital. That’s what I learned, and I know if I wanted to go, especially in consumer and [14:25] markets, you need to be the process executor and very fast [14:30] by VC as a #1. If you’re a #2, your life is so much harder, and it’s really hard at the #2 position.
Alejandro: I hear you. Here, you made the switch, and the next thing would be about aviation. How did you land in this company, OpenJet? Tell us about this really crazy experience that you had with the company.
Raphaël Vullierme: I had some emotional relationship challenge after going to Berlin. I wanted to get back to my roots, to Paris, where my life was. I still wanted to be an entrepreneur. I didn’t want to take a job because I was like, “If you’re going to take a job, then you’re going to basically become immobilized and be willing to take a risk again. The later you start your own company, the harder it is to accept risk and uncertainly. You need to stay an entrepreneur.” But I was kind of too weak as a person and emotionally to start everything again from scratch. So, I got the opportunity to acquire an existing business, which was OpenJet. OpenJet was a SaaS-enabled marketplace in the private jet industry – a bit like OpenTable of private jets. I knew nothing about private jets, but I got a very good offer, and it was 50% of equity of the company compensation. They say, “You took over the company, and there’s a market. You can do this, and let’s go for it.” It was a bit awkward to offer me – I think it was like 24, the company and the [16:19]. It was too beautiful to be true. I also asked a guy who was running the company before I took it over, and I asked him, “What’s the problem?” The problem was the co-founder [16:33] wasn’t a very trustworthy person. I was like, “I don’t know what to do.” But at the end, I decided to do it because it was [16:44]. I don’t know if it was weakness or strategy – I don’t know. I had to do it. I was reflecting a lot if it was a good decision or a bad decision. I think it was a good one because I learned a lot there, and I’ve done a lot of mistakes to replicate, and that led to the success of Luko today, but it was really hard to work on people on a daily basis that I could not really trust. They were not thinking long-term. They were trying to get advantage of their partners and everything, and it was a bit more, again, of a toxic future that I had seen first [17:21]. I stayed there 12 months. I loved the company, and it was quite successful in Europe and in the U.S. We had really good traction. It was an okay team and the reason was there, but when the company started to be working with the co-founder I didn’t trust, what I expected of him and he tried to take advantage of me and negotiate and let me sign [17:48]. The company exploded. So, we went to court. I won just enough money to survive the year with a [17:59] company. That was the story of OpenJet. It was not a very nice human story. It was an interesting one. After this experience, I was okay. I wanted to do something with someone that I absolutely trusted and with someone who had exactly the same values, and we need to build something that [18:21]. So, not a very great human story has helped me to figure out what was important for me beyond just having a successful business.
Alejandro: And here, we’re talking about partnerships and partnerships that end up going soar. I’m sure that there are a lot of people who are right now listening and that maybe they’re looking at partnering up with someone or finding a co-founder. What piece of advice would you share with them?
Raphaël Vullierme: All the value of your company comes from this. Everyone has already discussed it and say basically it’s really close to getting married. It’s a very long-time partner. I think what works well with my co-founder is we want to build the same thing, so we want to build something very large, and that has an impact on the world. It’s truthful. It’s not like playing bs on marketing, but we really want to make it. I think we have to try to grow with mutual impact. We know, for sure, this is what we want. That’s the first one. The second one is we know where we are with each other. My co-founder is our CTO and is dealing with a lot of tech competitivity, and I’m dealing more on the non-tech things. But, at the same time, I’m understanding what I’m doing. [19:58] but we never try to take the role of the other, and that’s super important. Then the last thing is my co-founder is a very, very good person and someone I really admire. Working with him – I don’t know if he’s a model, but definitely someone – even if he’s younger than me, someone I immensely respect and praise. That also helps you on a daily basis to be a better person.
Alejandro: That’s fantastic. I’m sure that people are taking notes. In your case, with Luko, which was your next rodeo, and your latest baby, in the early days, it was like a small family business. What were those early days like, and what ended up being the business model that we know as Luko today?
Raphaël Vullierme: We started Luko as a true bootstrapped company. In the early days, I had been working at a well-funded tech startup in the early days before Luko. When we started Luko, we had no money. I hadn’t made any money out of my two previous experiences. My co-founder was right out of university. So, we had a vision to build something about homes, about debt. One of our needs was to build a sensor to get the data. My co-founder started to do electronics and design the sensor, but we actually needed to produce them. The best way to produce them at a cost we could afford was actually to manufacture the device on our own. So we had my co-founder, me, and our families, like a little brother who was 12 years old or 14 years old actually producing the device. One of those guys got some small share of Luko, and, of course, it was unofficial, and it was, “We give you a decent amount of shares for helping us.” That was super helpful with the shares I got at that time, but that was definitely a true [22:09].
Alejandro: Then, how did the business evolve because here, one of the things you already got from your experience with Goodfood and Rocket Internet, was building the team and investing in culture. What would you say has been the mindset or the culture of Luko? How have you guys embraced that over the course of time?
Raphaël Vullierme: We started Luko for helping people at home to be a greener, safer, and fair model on returns called [22:46]. All people would join us in the early days. We were no one. That’s raised from big-named VCs, so we were like the only people joining us because they were like dreamers and crazy guys like us believing we could reinvent or change a billion-dollar industry, and also [23:07]. That was the core of it, and people were joining it because of that dream and potentially some equity it gets into: maybe one day we will do something that works. There were a lot of people with the same intention, with the same passion, with the same goals is actually incredibly powerful. So, I think a little money at the beginning really helped us to attract the right people and also share the same direction, and that’s what I’ve contributed to the success of Luko for the first 18 months. It was not really about us and not about building a cool insurance company that makes a lot of premium. It was about getting a dream onset to a potential rate.
Alejandro: In Luko, how much capital have you guys raised to date?
Raphaël Vullierme: To date, I think we’ve raised about 74 million. But the first big run with the big VC came 18 months ago. For three years, it was us trying to prove something. Then 18 months ago, we got Accel, and things started changing. We’ve been more impressive as hot-trendy stuff, but the difference has been our identity and who we’ve been [24:35].
Alejandro: So, given your past experience with partnerships, and we’ve touched on that, I’m sure that you were also very careful as to who you were going to allow to invest and to be part of this journey – more on the investment side, obviously, but what were you really looking for in those investors that you onboarded because I think you’ve gotten the who’s who. You’ve gotten people like Accel and even individuals like Assaf from Hippo, which is a great guy. He’s been on the show too, and even Founders Fund. What were you looking for in those guys that ended up investing?
Raphaël Vullierme: In the early days, I think we were looking for – you always look for super friendly investors. In the early days, we had a lot of guys from the insurance industry, and maybe they come from the insurance industry, but let’s execute in the way we want. They let us change. They allowed us to [25:41] and our new freedom. In the early days, some companies take big names or famous guys that are maybe going to bring more credibility. We did not add this, and we also make sure that maybe it was not big names, but those early ones were not toxic. So, basically, as I had very little say on what we were doing, and it was honestly, a lot of just pure money. It was already picky to make sure it was on the money and not expecting much more. Then when we started to be really picky because, in the early days, we were not very picky. We just made sure we had the right terms. We didn’t want to [26:28] in the future, but that was it. Then, we were looking for people who had super great reputations among founders and wanted to understand our industry and what we were trying to do.
Alejandro: In this case, for you guys, Raphaël, it’s a ginormous space. The market is tremendous. I’m wondering, if you were to wake up in a world where the vision of Luko is fully realized, what does that world look like?
Raphaël Vullierme: The very big vision is when you have a home, you have a lot to deal with, and generally, those things are not very exciting. So, you need to deal with your contract; you need to deal with your energy; you need to deal with your maintenance when you’re initially trying a solution. Today, this one is very, very complex. It’s definitely not holistic or seamless, so you have a different provider for everything. You have a lot of contracts, and it’s just very bad. Also, your home is not necessarily very efficient in terms of energy, but you never know who to trust. You risk and you get scammed by a repairman or even by a contract provider. The world we’re building, and the homes that we’re building are a very seamless experience to run your home, fix problems, and have a greener home. In a way, it’s now when you retire, you more or less go to Arizona, and you know you’re going to receive these things on time, and it works, and it’s a good price. We want more of the same kind of experience for your home, but definitely with a sustainable aspect that’s not really the case when you buy [28:25].
Alejandro: Absolutely. Just so people get a good sense of the size of Luko today, how big is the company? Is there anything that you can share around the number of employees or anything else?
Raphaël Vullierme: We’re 90 in the team today. We’ve got 100,000 homes insured. We’re only in France looking to expand to new countries this year, so we’re actually working on it. What is visible from Luko today is our home insurance offering in France, but we are also working on a lot of technology to prevent accidents, to make homes more energy-efficient. Those 20 to 25 people that have been working with us over the last two year, I cannot wait to get this product live, and I’m sure the full picture and what we’re building that is not only in terms of a contract but that is the same story that is also super interesting.
Alejandro: The question that I always ask the guest: imagine if you were to get into a time machine, and you’re able to go back in time and have a chat with that younger Raphaël that is thinking about what’s going to be that first business, even before Goodfood – you’re very first company. If you had the opportunity to chat with that younger Raphaël and give that younger Raphaël one piece of advice before starting a company, what would that be and why knowing what you know now?
Raphaël Vullierme: I’m a very acceptive person, so I’m generally very optimistic, and I have very few regrets. I just think things are – I wouldn’t change much. I would just say: stay hungry and be as exciting and following what you’re passionate about. Leave it to another person. Trust people. Invest in people. Be yourself with everyone. I wouldn’t change much in that statement. What works so far is putting so much energy in what you’re doing – no compromise and going full speed. Of course, I have a lot of technical stuff on the house [30:36], but this does not last a long time, so doing the same thing.
Alejandro: Absolutely. So, Raphaël, for the people that are listening, what is the best way for them to reach out and say hi?
Raphaël Vullierme: My email is [email protected], and I’m not a Spanish person. Raphaël is with a ph, not with f.
Alejandro: Okay. That goes for people like me. Alrighty. Well, Raphaël, thank you so, so much for being on the DealMakers show today.
Raphaël Vullierme: Gracias, Alejandro.
* * *
If you like the show, make sure that you hit that subscribe button. If you can leave a review as well, that would be fantastic. And if you got any value either from this episode or from the show itself, share it with a friend. Perhaps they will also appreciate it. Also, remember, if you need any help, whether it is with your fundraising efforts or with selling your business, you can reach me at [email protected].