2.4% - 13.1%
min - max equity offered
NZ$100,000.00 - NZ$600,000.00
min - max investment sought
min investment parcel
Well done on the first license deal, in the update you mention that the terms are confidential, but say that the upfront license fee is for more than the equity crowd funding raise. Can you advise is that more than the $100k minimum, or $600k maximum as that is quite material. If more than $600k why not just use those funds and cancel the crowdfunding offer?
Hi Ralph, great questions. The immediate payments are close to the minimum $400k we were looking raise so we've adjusted the range. The deal does represent more than this and the benefits will flow once we deliver the platform and the products to Australia. Great news for current and new investors.
Replied to Ralph Shale
I had a quick look at your website. I have to say what an easy process and wish that it was that simple when I purchased my insurance policies. Questions I have regarding to this offer are as follows:
(a) What exit value range are you aiming for and the timeframe you are aiming for?
(b) How long have you launched the website? Can you tell us a bit more about the statistics on (1) the number of site visits since launch (2) conversion rate - i.e. % of visitors to website that lead to signing up a policy?
Hi Julian, thanks for the feedback on the website and some good questions. (a) The exit timeframe is 2 to 3 years, we can't discuss exit price but obviously we intend a price you'd expect for the timeframe and risk of the investment. (b) The website launched in late August, we're receiving traffic both from the media coverage we've been getting and our Facebook campaigns which we started recently. (1) In the past 3 weeks we've had 739 sessions on the site. (2) the conversions currently are in our launch range for conversions of 1 - 5%, we have medium and long term plans to improve these conversions but it's a good start. Thanks for your questions and I hope we can welcome you on board as an investor.
Replied to Julian So
Are you only targeting under 35's? why?
I would have though the 35-45yo market were also tech savvy, have higher incomes and greater insurance needs (more likely to have families) and the risks aren't significantly more that your online tool wouldn't be appropriate.
Hi CJ, great question. We have a 35+ product in the pipeline for 2016 which is mentioned in the IM and under Product Strategy in the Project Overview. We have also had questions on the Volo Facebook page asking about 35+ products for continuity so there is market interest for these products as well. So you're right there is definitely an opportunity for 35-45's and it is in the plan.
Replied to Craig Jakich
The public date for the deal has changed to September 28th? Why the change?
Volo is excited to announce that due to many private investor enquiries the Public Launch is now 9am on Monday the 28th of September.
Demand and requests for the offer to be made public have been strong but at Volo we are committed to ensuring those who have requested private access to have time to complete their due diligence. We're looking forward to allowing the public a chance to share in our success!
Replied to Lachlan Stuart
The need for insurance to facilitate protection against risk is a very old one. However, as in many other industries, the way that consumers would prefer access to this is changing. Mosaic believes Generation Y consumers, in particular, have preferences that are not being adequately served by traditional sales channels.
Insurance is a huge, global industry that allows individuals and organisations to manage risk exposure. Most will be familiar with the basic insurance business model:
consumers make regular payments to insurance companies in exchange for the promise that the insurance company will pay out in the event of the consumer suffering an adverse event.
Like insurance globally, New Zealand’s insurance market is highly regulated and subject to capital controls that form strong barriers to entry by local and overseas competitors. The Financial Markets Conduct Act controls the organisations which provide financial advice in New Zealand.
The total New Zealand Life insurance market was worth $1.9B in 2014. The largest insurance providers are Sovereign, AMP, OnePath, Asteron, Fidelity, AIA, Partners Life and Banks. In addition, the New Zealand government provides workers' compensation insurance as a regulated state monopoly through ACC.
Insurance can be segmented in several ways, including:
- Category (e.g. individual insurance, company insurance, reinsurance);
- Product (e.g. life insurance, health insurance, home and contents insurance);
- Consumer (e.g. age, income level, life stage); and
- Channel (e.g. direct sales, brokers, online).
The New Zealand Generation-Y Insurance Market
There are 870,000 18 – 35 year olds (a generation of people commonly known as “Generation Y”) in New Zealand, expected to increase to 110,000 by 2020. This group is characterised by high education rates, high propensity to travel overseas, and high use of smartphone technology and social media.
Some more facts about Generation Y in New Zealanders:
- In urban areas like Auckland and Wellington, 40% or more earn over $40,000 per annum;
- They are the most educated of any generation and are much more likely to be heavy internet users;
- They recognise the need to protect themselves against adverse events, but have low actual insurance coverage rates relative to the rest of the New Zealand population; and
- Generation Y consumers have a high look-rate for insurance, but their completion rates are low.
All this indicates Generation Y are educated and financially savvy enough to know that insurance is important to protect their lifestyle, but are simply not well-suited to being engaged through the traditional direct personal relationship model currently heavily used in New Zealand.
Generation Y consumers want information available in the moment and instant gratification - they have come to expect the buying process of any product to be seamless and straightforward online, without requiring face-to-face interaction; and that’s where Volo comes in.
Life Insurance Market Size
By international standards, all adult New Zealanders have very low levels of personal life insurance cover even if ACC premiums are included. 60% of disabilities that last longer than 6 months in New Zealand are illnesses which are not covered by ACC.
New Zealand ranks 28th out of 31 in the OECD in personal life risk cover. Research undertaken by the Financial Services Council, NZEIR and Massey University confirms significant levels of under-insurance by Generation X (Born 1965 - 1980) and Generation Y (Born 1981 – 1995).
Adult New Zealand Life Under-Insurance, Split By Age Group
Generation Y represents the largest proportion of the population that are uninsured or under insured. Focus group research conducted by Mosaic confirms that Generation Y’s have very low product uptake levels due to the complexity of current products and their avoidance of face-to-face sales people.
The figures above include uninsurable occupations such as military, police and firefighters. We have conducted further research to size the total insurable Generation Y market and have found 840,000 New Zealanders are Generation Y and insurable. Given an average price of $1.75 per day for the Volo Life Product, this gives an estimated potential market size of $537 million per year for Generation Y Life Insurance in New Zealand.
In 2014 there were 550,000 individual overseas trips made by Generation Y New Zealanders. This group have the highest number of days absent from the country per trip with an average trip length of approximately 22 days. Over 65% of Generation Y New Zealanders look for travel insurance online and over 20% forget to buy travel insurance before departure.
Based on the daily cost of insurance per day per destination, this represents a potential market size of $87 million per year for Generation Y Travel Insurance in New Zealand– of this, approximately 60 - 65% is currently being fulfilled.
We are targeting the undersold New Zealand Generation Y market (those currently aged 18 – 35 years old) with insurance products that meet their needs and are simple to purchase via their preferred method – web and mobile.
When existing Volo customers turn 36, we will aim to serve these customers with different products to meet their changing needs. These products are on the 2016 research and development road map as detailed later in this document.
For more about our target market segments and why we have decided to pursue these particular opportunities, please refer to the “Industry Overview” section of the Offer Document (IM) in the documents tab above.
The Generation Y segment has been largely underserved with insurance due mainly to the business model of the incumbent providers being centred on advice through Brokers and In-House Advisers – a delivery channel which which is not appealing to the Generation Y customer. Also, the products offered do not resonate with Generation Y, being difficult to understand and ill-suited to the needs of their lifestyles.
We believe Volo’s competitive advantage when targeting Generation Y consumers are:
- Smart electronic platform, engaging for Generation Y, making purchase straightforward;
- Insurance products aligned to the dynamic lifestyles of Generation Y consumers;
- Easily understood terms and conditions;
- Affordable (options available from less than $1 per day);
- Guaranteed acceptance means cover is approved from time of payment;
- Location detection provides reminders of when insurance may be needed (e.g. at airports);
- 24/7 worldwide coverage; and
- Known Benefits at time of purchase.
Traditional Insurers are heavily constrained by their existing marketing channels, outdated systems and processes and expensive commission structures. The guaranteed acceptance no-advice business model disrupts the traditional face-to-face insurance model and cost structure.
At present, there is no single comparable product in the New Zealand market that offers the combination of cover offered by Volo Lifestyle and Volo Travel.
To get the same level of cover from our competitors, a consumer would need to buy several different policies. For example, Volo Lifestyle policy of $4,000 per month in benefits for $30 plus GST per month. A similar set of benefits across a competitor’s products would involve buying separate products of: Term Life, Trauma, TPD Income Protection and some Medical/Accident cover and the combined cost of these ranges from $65 to $80 per month.
We have launched our first Volo Product on the Volo Website and have new products in development for launch in 2015. The Volo app for iOS and Android will be released in 2016 and we will continue to further develop our product offering using feedback gained from our customers to increase our market share of Generation Y customers in New Zealand.
The directors expect that the successful implementation of these strategies, along with proof of platform, will lead to an increased valuation of the business.
Opportunities exist to license the technology; these provide significant income potential but are not included in the valuation.
The directors of MOSAIC believe there are at least three potential liquidity possibilities for shareholders who invest through this offer:
Trade sale of the technology platform to:
- One of our main insurance partners, to bring the platform being used to distribute their products in-house;
- A competing New Zealand insurance company that wishes to gain access to our intellectual property, customers and Generation Y insights;
- An overseas insurance company wanting to gain access to New Zealand and our technology – in particular, one that is already ahead of the curve in understanding the need for web and mobile services to reach Generation Y customers; or
- A financial investor such as venture capital or private equity.
Note: In the event of a trade sale, the expertise of Murray Lilley will be utilised, as he has already negotiated the successful exit of Kumar LIlley Associates Ltd which was sold to KPMG.
- A listing on a New Zealand exchange such as NXT or NZX would require successful execution of our growth strategies over the next 3 – 5 years. Exchange listings can be structured to allow existing shareholders to sell some or all of their shares at the time of the listing and generally creates greater liquidity for shares once listed.
- Shareholders can sell their shares by private agreement. Management and Board are fully supportive of shareholders wishing to buy or sell and will assist wherever possible.
Full Information Memorandum for Mosaic Enterprises LimitedDownload
Mosaic New Contract Update
Mosaic has signed a licensing agreement with an Australian provider to license the Mosaic platform.Download
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The investors below have committed capital to the business in this funding round.