Ondo Insurtech Share Discussion Threads

[cyberbub] 12/11/2024 16:09

Insurance company customer churn the UK is widespread. Has anyone got any clarity what happens if a Nationwide US customer gets a Leakbot installed and then they move to a different insurer? Will Ondo lose their annual $60 presumably? (Unless they've got to the position where they have coverage by most large US insurers, in which case the $60 might transfer over?)

[hamidahamida] 12/11/2024 14:37

Nationwide is 1st many Announcements https://youtu.be/yyE11AcaduA?si=vMTHCmXWof2RbmKQ

[homebrewruss] 12/11/2024 14:31

Cyber yes I think I/we see it like that. Worth looking at how many addressable homes ONDO have (a lot more after today) the synergies that ONDO have for other insurers once they start working in states where other insurers are and also the take up they have had of Leakbots in other countries eg Sweden.

If they get to 500k units I can't see that they would stop there. Main risk at the moment is reaching breakeven and the speed of rollout with all customers wanting to do a pilot to date before then starting to rollout.
The change to ramp up production suggests this is about to get derisked on that front.

The US insurance market with much higher insurance costs makes the ONDO Leakbot proposition a great fit.

[homebrewruss] 12/11/2024 14:26

Also worth looking at the similarities to Ting who have a very similar proposition for fire in the US and ONDO have good connections with.
State farm have committed to 2m Ting units and Ting have now deployed over 1m, mostly in them last two years since the deployment started ramping up at approx 50,000 per month for the last year or more.

[cyberbub] 12/11/2024 14:26

If you take the company's planned 40,000 units per month and assume that all get sold, that's 500k units per year. If you assume Dowgate are correct and they basically make a gross margin of $40/yr average, then that would be $20m gross = £16m. Knock off say an increased £6m overheads and then tax and you get approx £7m clear profits. On a p/e of 15 which I don't think is unreasonable with high recurring revenues, that could be about £100M cap, or about 3x from here. Of course there could be substantially more business in future. They'd have to expand their factory or build a new one. Or outsource the manufacture to keep it capital light.

Is that how others see it?

[cyberbub] 12/11/2024 14:08

It's impressive (and fairly astounding) that the company have committed to finding and repairing any leaks detected, at their own expense, out of a $60/year fee. I appreciate that it seems that only 1.5% of Leakbots detected a leak in the US pilot. You have to assume that will happen every year (which I think the spreadsheet does). And as pipework gradually gets older, presumably that %age will start creeping up. I suppose the company could start increasing its monthly fee price, once it's got customers locked in. Hopefully some sort of increase is baked into the contracts with insurers.

[hamidahamida] 12/11/2024 13:49

RNS FROM NATIONWIDENationwide, LeakBot Expand PartnershipSmart home solution to now be available to Nationwide customers in 16 statesColumbus, OH – Following a successful Ohio pilot, Nationwide and Leakbot are expanding their partnership to make Leakbot devices available to even more Nationwide customers-at no additional charge.The two companies will provide a limited number of Leakbot devices to Nationwide customers in 16 states, including Idaho, Illinois, Indiana, Kentucky, Maryland, Montana, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia.The service will be available to both existing and new customers as a standard part of Nationwide's homeowners insurance offering. The initial pilot program, which began in January 2024, provided 6,000 LeakBot devices to Nationwide policyholders in Ohio and Washington.Since the partnership's launch, LeakBot has already successfully identified and repaired 90 leaks in Nationwide customers' homes, including 16 that would have caused significant property damage if left unresolved.Craig Foster, CEO of Ondo InsurTech, the parent company of LeakBot, expressed his enthusiasm for the partnership: "We're thrilled to partner with Nationwide to bring our water leak detection technology to more homeowners. The early results have been extremely positive, and we look forward to expanding our service across the Unites States, helping even more people prevent the inconvenience and expense of water damage."LeakBot comprises of a single self-install sensor that monitors the whole of the freshwater plumbing system to find hidden leaks, alerting homeowners before they turn into major issues. LeakBot then provides their own expert technicians to find and fix the root cause of the leak in homes – all provided at no charge to Nationwide customers.Nationwide's partnership with Leakbot demonstrates the company's "predict and prevent" mindset and shows that finding an issue and fixing it before it becomes a major problem is good for both the company and the customer."Nationwide is committed to fulfilling the promises we make to our customers and that includes paying out claims to make our customers whole," said Mark Teets, Associate Vice President of Personal Lines Underwriting Strategy at Nationwide. "But in our mind, it's better to catch these issues early. Water damage can take weeks, sometimes months, from which to recover. Also, many times, the items damaged are family photos, heirlooms...things that just can't be replaced. These situations can put a lot of strain and emotional stress on the homeowner and their family. Having these devices in place provides a sense of protection that is priceless."The innovative solution has already demonstrated remarkable success, with a Net Promoter Score (NPS) of +87 and an average Customer Satisfaction score of 4.9 out of 5 among Nationwide customers. This outstanding feedback highlights the value of LeakBot's service and its ability to significantly enhance homeowners' peace of mind. Homeowners have praised LeakBot engineers for their professionalism, expertise, and dedication to solving problems. One satisfied customer shared, "Carl was incredible. He went the extra mile to diagnose and solve a tricky problem. Whatever he makes, he deserves a raise!" Another added, "Nathaniel fixed a number of problems today and helped me by giving ideas on how to make my plumbing work best for me. Highly recommended!"Read about Con Keefer's experience with Leakbot here .Customers in one of the 16 eligible states who are interested in receiving a Leakbot device can talk to their agent or learn more here.

[homebrewruss] 12/11/2024 12:53

Cyber have sent you a private message.

There are some outstanding warrants fwiw which should now be in the money so this would bring in some extra cash if/when exercised.

Something like:
6,791,666 warrants @ 20p (12th May 2023)
Also 9m warrants @ 25p

[cyberbub] 12/11/2024 12:39

Yes good point about the insurers paying upfront for the units, reducing pressure on working capital. But of course they'll still have their (relatively) big admin expenses to cover in the next 6-9 months.

[cyberbub] 12/11/2024 12:23

Thanks, are the Dowgate notes available somewhere?

[homebrewruss] 12/11/2024 11:58

There's not a limit of 5 years as far as I'm aware.
Maybe it's due to the constraints on width of the table in the report :) or perhaps they are not prepared to forecast further than 5 years at this point.
They may also have an assumed lifespan in their note on each device though not clear.

Agree that breakeven by end of March 2025 looks unlikely but they may have sufficient leakbots deployed by then for them to be breakeven once their initial cost has been paid for and if the new deals/deployments incorporate an upfront payment like the one today then that covers them?

Latest interview today from the chairman for a bit of colour:


There are some good presentations on Investor meet eg


and the Dowgate notes are worth a look.

[cyberbub] 12/11/2024 11:45

Thanks Russ very helpful.Why does the note say 'Contract 5 years'? Surely if it's a great technology then the insurers will want to keep it going? Or do the units only have a 5 year lifespan?I can see how revs and profits could start to snowball. I suppose there's still a risk about the cashflow forecast, I would be surprised if they were able to hit breakeven by March 2025, perhaps on a run-rate but actual cash balance will lag.The last results also showed substantially more trade payables than receivables, which will have taken a chunk out of the last raise.Will keep researching.

[homebrewruss] 12/11/2024 11:01

Margins per Leakbot are approx 79% after year 1 according to the Dowgate note a while back

Company is aiming for breakeven by end of March 2025.
Latest Dowgate note looks to have breakeven by 2026E on revenues of 11.6m but figures/timeline will not probably include the upcoming news that the company have hinted at and the required increase in production they have arranged.

[cyberbub] 12/11/2024 10:41

If admin expenses and interest payments are around £4.5M then they need approx £16M revenues to break even?

[cyberbub] 12/11/2024 10:24

This looks like an interesting company, I recall having a look some time ago.

Margin is decent at about 28%, but I wonder if there's any plan to increase this if they have patented tech?

Having looked at the last results, they're still losing money. Is there any official forecast of when they'll break even? Or will there be one last raise needed?

Management pay seems quite high. But their results show that overall staff pay has gone down dramatically compared to 2023, this seems a bit odd? Did they let a load of people go, development/design staff maybe?

Thanks for any info from LTHs

[hamidahamida] 12/11/2024 09:06

Savings are huge hear that stats from the horses mouth The Big Swedish insurer Look what big Swedish insurer LF Sormland achieved by giving LeakBot to their customers for free:40% of their customers took up the offer Customer numbers grew for first time in many years Water damage claims costs declined by massive 40%https://x.com/ondoplc/status/1836294362860257688?s=46&t=b0GZtBw9WLMEyLYDE-UiEA

[mdchand] 12/11/2024 08:47

Finally, remember Nationwide has only a 3% market share. That leaves an awful lot of market share to chase after.

[mr paul b] 12/11/2024 08:46

They do have 29 patents in place . Plus they will have first mover advantage..

[mdchand] 12/11/2024 08:41

My take is that with Nationwide looking to accelerate the roll out of Leakbot, in a traditionally conservative industry, it is inevitable that this will force other insurers to accelerate their own plans to trial or adopt Leakbot.

Remember, the cost of Leakbot is more than offset by the savings to the Insurers, so the faster they roll out Leakbot, the higher the savings and the greater the profit. Having high client satisfaction is also a win win.

Even though its IP protected, I wouldn't be surprised to see copycat models appearing shortly. Hopefully Ondo has the legal capacity to defend its tech as and when that happens.

[mdchand] 12/11/2024 08:36

Some updated commentary from the house broker re coverage

15 new States: Building on the 6k-unit pilot in Ohio, NW will expand its offer of free LeakBots and repair services to new and existing customers in 15 other States: Pennsylvania, Maryland, North Carolina, West Virginia, Montana, Idaho, Kentucky, Indiana, Vermont, Oregon, Virginia, Tennessee, Illinois, New Hampshire, and Washington State. The commercial details are confidential, but we anticipate follow-on orders of at least 1k per State (so 16k-20k units?) under the US model of $5 monthly subscription with the first year being prepaid, which more than covers the working capital for production and shipping. Without detail it is difficult to assess the P&L impact, but such a 20k-unit order would see >$1m cash received up-front by Ondo. We will review f/casts with the Interims.

No large outlay on new engineers: In Washington State, Ondo already has an insurance partner (Enumclaw) and service cover - but the other 14 are virgin territories, requiring setup of the detection and repair service. We understand four States (PA, MD, NC & WV) have significant densities of current NW customers and will see the bulk of the initial devices and engineer support from launch. The other states will be covered from day one by visiting engineers servicing job batches under eased SLAs; so we initially expect a need for just 4 or 5 new engineers to join the 3 already in the US covering Ondo’s existing four States (OH, WA, NJ & NY). As state volumes grow, more engineers will be added and Ondo will approach other regional insurers there to further increase LeakBot density. In this way partner orders - with lump-sum pre-payments and marketing commitments - will support the expansion of the plumbing network.

Production increased: We estimate c.35k units currently in stock (>17k in the US) and the Bedfordshire facility has been delivering 10k units pm on a single shift, however with the recently announced small investment from Ondo (<£100k), it will be able to step up to 40k pm (almost 500k pa) on two shifts.

[pdt] 12/11/2024 08:18

For me the significant news is that they have the plumbing service infrastructure in place to now service some 19 states. This makes it a lot easier for new insurance customers to launch confident that leaks found can be fixed. And this has been achieved without any capital strain because Nationwide have funded this up front. I expect many new insurers to be announced over the next 12 months. Excellent news!

[mr paul b] 12/11/2024 08:13

This little gadget has the potential to save Hundreds of millions of dollars.

[mr paul b] 12/11/2024 08:12

I wonder what State Farm are thinking today ?.

[hamidahamida] 12/11/2024 08:08

Foster said recently that in USA when one insurer goes national they all follow quickly Example Tingfires rapid deployment from 100k to 1 million units and expending at 50k units per month