# Luko Financial Model

Luko is a French neo-insurer reinventing home insurance and expanding into a full "Home Care" companion (prevention, coverage, maintenance & repair) for European homeowners and renters.

- Canonical: https://finamodel.com/startups/luko
- Excel download: https://finamodel.com/startup-models/luko.xlsx
- Category: InsurTech
- Model type: SaaS ARR / Valuation
- Funding round: Series B
- Funding: $61M
- Founded: 2020
- Geography: France (at time of deck); Europe expansion planned [DECK slide 14]
- Customer: B2B2C

## About the company

Luko is a European neo-insurer for homeowners and renters, combining home cover with prevention, monitoring, maintenance, and repair services. Its Home Care proposition extends beyond claims toward managing household risk proactively.

Customers pay monthly premiums and Luko retains a 30% management fee while the remaining premium funds claims or charitable giveback. It had protected 100,000 homes by the end of 2020 and grown MRR sixfold since its Series A.

The model combines insurance fee income with Home Care cross-sell. Homes insured, average premium, fee rate, loss ratio, service attachment, and retention drive revenue. Claims, acquisition, IoT cost, and eventual carrier risk determine profitability.

## What's included

- 5-year monthly revenue build with stage-appropriate growth assumptions
- Full P&L, headcount plan, and operating-expense schedule
- Cash-flow statement, runway, and burn-rate tracking
- Valuation via exit multiple with a DCF cross-check
- Returns analysis with MOIC and IRR
- Unit economics including CAC, LTV, payback, and cohort retention

## Product & value proposition

Three-pillar "Home Care" platform:
- **Protect** - IoT home monitoring (connected sensors, doorbell, leak detection, weekly reports, vacation mode); prevents accidents before they happen.
- **Cover** - All household insurance in one place: home insurance, landlord insurance, legal insurance (from €5.90/mo), mortgage insurance. 30% flat fee retained; remaining premium goes to claims or is given back to charity.
- **Care** - On-demand vetted professionals for repairs and emergencies: locksmith, plumber, video home check-up, etc.

Underwriting differentiators: 2-minute digital onboarding using external datasets; AI + claims manager for fast settlement; smartphone-based damage assessment (dual camera, Face ID, GPS, document scan); payment via Revolut-style instant transfer.

Certified B Corporation.

## Market

- European home insurance GWP: **€100Bn/year**
- Annual incident volumes (Europe): 1.5M fires (€10Bn claims), 14M water damages (€40Bn claims), 1.7M break-ins (€10Bn claims)
- No SAM or SOM breakdown provided.
- No market growth rate stated.
- Company aspiration: "€10Bn+ company"

## Revenue model

- **Premium revenue**: Customers pay monthly premiums; Luko retains a **30% flat management fee** on all premiums. Remaining 70% goes to a claims pool (giveback to charity if unused). As a full-stack insurer (target 2022–2023) the company will bear the insurance risk directly rather than ceding to a carrier.
- **Home Care services**: Cross-sell of IoT devices (video doorbell), professional services (locksmith, plumber, home check-up). Monetisation structure not detailed in deck.
- **Pricing examples**: Legal insurance from €5.90/mo; house insurance €14.43/mo; landlord insurance shown at €24.87/mo.
- **Channel**: 100% direct digital (app + web), no brokers. Word-of-mouth flywheel stated as key acquisition driver.
- No explicit ARPU, average premium, or commission rate beyond the 30% flat fee.

## Traction & metrics

- **100,000 homes** protected with Luko by end of 2020
- **MRR x6** since Series A (~12 months prior), despite 3 months of COVID hard lockdown
- **Quarterly new MRR** chart shows consistent growth from 18.Q3 through 20.Q3, with a dip in 20.Q2 (COVID lockdown) followed by the largest quarter in 20.Q3
- **NPS: 75** vs EU insurance industry average of 20
- **4.6/5** on Trustpilot, 200+ reviews
- **40% of users churn** after filing a claim (industry benchmark, not Luko's own figure)
- Team size: 77 people (Ops & Admin 25, Tech & Product 34, Growth 12, Insurance 6)

## Competition / moat

**Competitive landscape**:
- Traditional insurers (Matmut, Groupama, Macif, AXA France): Trustpilot ratings "Bad" / ~1.3–2.1/5.
- Direct insurers (L'olivier Assurance, Direct Assurance): similarly poor reviews.
- No direct neo-insurer competitors named.

**Moat / differentiation**:
- NPS 75 vs industry 20 - brand and CX moat.
- Flywheel: CX → word of mouth → data → better underwriting → lower loss ratio → higher retention.
- IoT prevention data reduces claims frequency - proprietary underwriting edge over time.
- 30% flat fee / giveback model creates trust-based positioning distinct from commission-driven incumbents.
- B Corp certification as values signal.
- Full-stack insurer transition (2022–2023) eliminates MGA dependency and improves margins.

## Team & funding ask / use of funds

**Founders & key hires**:
- Raphael Vullierme - co-founder & CEO; prev. OpenJet CEO, Rocket Internet GVD; HEC Paris.
- Benoit Bourdel - co-founder & CTO; Machine Learning engineer, Nuclear Physics researcher; Ecole Polytechnique.
- Strong leadership bench: VP Growth (BCG, HEC), Chief Actuary (Admiral France), VP Operations (Airbnb), VP Product (Withings CPO), VP Marketing (Uber), VP Finance (Société Générale/EY/HEC), Lead Data Science (French Intelligence Agency/BNP), Head of Risk & Compliance (ACPR/SCOR/Munich Re/AXA).

**Funding ask**: Series B - amount not stated in deck.
**Use of funds**: Not itemised in deck. Strategic intent is to (1) scale EU home insurance fast, (2) build out Home Care services platform, (3) pursue full-stack insurer licence.

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## Recommended financial model

**Archetype + why**: Insurance GWP / combined-ratio model with a home-services revenue layer.
Luko is a P&C insurer with a fixed 30% fee on GWP - the primary P&L driver is premium volume (customer count × ARPU) and the loss ratio on the 70% claims pool. As it transitions to full-stack, underwriting risk moves on-balance-sheet, making a proper combined-ratio (loss ratio + expense ratio) model essential. A secondary SaaS/services revenue line (IoT devices, professional services) adds optionality but is small today.

**Forecast horizon & granularity**: 5 years (2020–2025); monthly for Year 1–2, quarterly for Year 3–5. Series B capital deployment warrants detail in the near term.

**Key drivers & assumptions**:
- Customer count (homes insured): 100,000 at end-2020; growth rate
- Average monthly premium (ARPU):
- Gross Written Premium (GWP) = customer count × ARPU × 12
- Luko revenue (management fee) = GWP × 30%
- Loss ratio on claims pool:
- Operating expense ratio:
- Home Care / services attach rate:
- Headcount growth: 77 employees at Series B;
- Full-stack insurer transition (2022–2023): model should toggle between MGA fee revenue and full GWP-minus-claims revenue structure
- Geographic expansion to broader Europe:
- Giveback / charity accrual:

**Scenarios (Base / Bull / Bear - which variables flex)**:
- **Base**: 80%→40% customer CAGR; loss ratio stabilises at 50% of GWP by 2023; services attach 15% by 2023.
- **Bull**: Customer growth stays >100% through 2022 (strong word-of-mouth, fast EU rollout); loss ratio drops to 42% via IoT prevention; services attach 30%.
- **Bear**: Growth slows to 30–40% post-Series B; loss ratio pressure from adverse claims (water damage frequency); EU expansion delayed to 2023; services monetisation minimal.

**Required sheets / outputs**:
1. **Assumptions** - central toggle sheet (all drivers, scenario selector)
2. **Customer model** - cohort-based (monthly adds, churn rate, cumulative homes insured)
3. **P&L (Insurance)** - GWP, management fee revenue, claims pool, loss ratio, contribution margin; toggle MGA vs full-stack
4. **P&L (Home Care services)** - attach rate, ARPU uplift, gross margin on services
5. **Consolidated P&L** - EBIT, EBITDA
6. **Headcount & OpEx** - by department, matching deck's org structure
7. **Cash flow & runway** - burn rate, Series B proceeds, months of runway
8. **Balance sheet (stub)** - especially important post full-stack transition (claims reserves, regulatory capital)
9. **Valuation** - GWP multiple (typical 1–3× for insurtechs) and/or DCF at terminal loss-ratio
10. **Dashboard** - KPIs: homes insured, GWP, Luko revenue, NPS, loss ratio, cash runway

## Frequently asked questions

### Is the Luko financial model free?

Yes. The Luko model is a free Excel download with live formulas.

### Can I change the assumptions?

Yes. The workbook is editable and its live formulas recalculate when assumptions change.