Ondo Insurtech Share Discussion Threads

[mighunter] 27/11/2024 12:20

I guess you have to weigh that risk up with current trajectory and track record of earlier incumbents. The likes of Länsförsäkringar having a 40% reduction in claims and the devices there have now been in place for nearly two years and pilot trial before that. One also needs to look at the cues in the US. Our Chairman has pointed to the potential for Leakbot to become mandatory on policies (akin to specified lock standards in theft prone areas). Also the fact that in states such as Indiana, 3 Insurers now offer Leakbot. Suddenly to retrace puts an Insurer at a disadvantage. I'm quite comfortable that barriers to withdrawal are getting stronger. US insurers are earlier in the adoption curve but I don't think we'd see 16 state expansion with money up front if Insurers viewed this as only a 2 year play.

[chrysalis99] 27/11/2024 11:32

I can't get access to Dowgate for some reason. Would be interested to know their revenue or installation forecasts for the next couple of years.

[cyberbub] 27/11/2024 10:48

Mighunter I appreciate that Ondo can just disconnect the units from their database if the insurer doesn't continue to pay. I'm more querying whether having a "recurring revenue" model where the recurrence is potentially only for 1 or 2 years by contract, has to be considered as a risk? The Dowgate revenue table shows it running to 5 years, and it could be extended further in theory (subject to battery replacement on the units) but if the contract is only for "2 years minimum" it's not really giving confidence of reaching 5 years?

[kiplig] 26/11/2024 21:53

I agree with you Mighunter. I was involved with a medical device company a number of years ago. The device was an obvious winner, but takeup was frustratingly slow, until it finally broke through and then accelerated at speed. Why? Because many companies want to follow rather than lead. The fact that these tier 1 companies are using leakbot is important validation that makes it easier for new clients to follow. I have absolute faith that we'll soon see this expand at pace.

[cyberbub] 26/11/2024 21:13

Sounds encouraging!I still have a little niggle about two things:1. It's essentially a single product company. Although I suppose once profitability arrives it can start investing in other ideas?2. I still don't quite understand how they have a "minimum 2 year term" on their contracts with insurers. What happens if the insurer decides not to continue after 2 years? The units will still be in peoples' houses, and Ondo will only have made 1 year of revenue (since Year 1 is wiped out by making and shipping the unit). Anyone got a better understanding?

[homebrewruss] 26/11/2024 15:50

New interview re today's news

[mighunter] 26/11/2024 11:57

I like the market's slightly muted reaction to expansion news, I've used it to add. New contracts will ultimately be the driver of real value change, but if incumbents weren't expanding their provision I'd be worried. It's the real proof. For other Insurers watching and waiting to play their hands, the expansion by Nationwide, Selective etc is both affirmation of the internal results as well as an insidious differentiation in both premiums and coverage. They can't sit on the sidelines forever.

[chrysalis99] 26/11/2024 11:32

Thanks HBR

[homebrewruss] 26/11/2024 11:07

I posted a quote from the Dowgate note above re size of the customer. Also Dowgate have said they will update their forecasts when the interims come out next week.

[chrysalis99] 26/11/2024 10:40

Anything new/interesting in this morning's Dowgate note?

[geoffsh] 26/11/2024 10:11

I don't think a lot of people realise how significant yesterdays Rns was, Ondo have a relatively small amount of shares issued and even with another 26.94M of warrants added on to the 116.47M currently issued this only adds up to 143.41M.

With the recurring revenues becoming ever increasing profits with little ongoing costs, with the expectation of achieving EBITDA in the second half of next year without the need for further working capital funding it looks very likely that Ondo will become a very profitable company going forward with very little dilution of the small amount of 143.41M shares.

Another positive for Ondo is that being traded on the main LSE rather than Aim institutions are more likely to invest.

[homebrewruss] 26/11/2024 08:26

'The original contract with Selective was signed in Feb24. Headquartered in Branchville, New Jersey, it has been in business since 1926 and is listed on NASDAQ (SIGI) with a $6.1bn m/cap (a S&P600 constituent). Selective is the 39th largest US property and casualty insurance group, employing >2,000 staff in its branch office network. It focuses on delivering tech-based insurance in a ‘’high-tech, high-touch” business model, making it an ideal partner for Ondo. We estimate it will have >100,000 homes covered across the US. • The back-fill policy being delivered. These were four of the 15 new NW States'

I still think we are waiting on a big order to use the new capacity.

[pdt] 26/11/2024 07:49

Good news but again it is an expansion of an existing insurer. I think we still have significant news of a new insurer to come in the next 4 weeks. Feels like the snowball is rolling down the hill and gathering pace.

If you are an insurer in Indiana you are going to need to add leakbot to your offer. You have Nationwide, Indiana Farm Bureau and now Selective all offering free water leak detection probably at a lower premium. That makes existing customers sticky and wins new business and market share.

[cyberbub] 26/11/2024 07:46

Good news, although no numbers so assume it's small?

[cottoner] 26/11/2024 07:32

Today's contract means Leakbot now covers 5 States with Selective Insurance , another 10 possibly available with them.


Selective Insurance offers customized personal insurance coverage options in the following states: AZ, IL, IN, IA, MN, MD, NJ, OH, PA, RI, SC, TN, UT, VA, and WI.

[cyberbub] 25/11/2024 23:53

Dropping news of another major contract just before the results would be very good, if feasible to time it!

[homebrewruss] 25/11/2024 18:13

The holders won't sell the warrants below 20p for sure so that's the base and the nearest exercisable ones and largest number are at 25p.
When the 20p ones come up for expiry hopefully the share price is higher still than the current level

[cyberbub] 25/11/2024 18:07

Depends how aggressively the holders sell the warrants.. but yes you're right. Still identical dilution though.

[homebrewruss] 25/11/2024 17:30

Disagree slightly in warrants being the same as a raise. They won't pull the price down in the same way as a placing at a discount.

[cyberbub] 25/11/2024 16:36

The latest Dowgate report is reasonably positive, but it's slightly disingenuous about "a dilutive raise being unnecessary" if the warrants are exercised. Although they're a bit more transparent and foreseeable, warrants act exactly the same as a raise - they mean the company issues shares for cash!The 20p warrants may already be being sold. Once any warrants issuance RNS appears, of course the front-running stops. I imagine the 25p warrants won't be sold until we hit 35p?

[cyberbub] 25/11/2024 15:36

Yes it will probably take another 2-3 months to bed-in 2 full shifts. Not an issue.

[homebrewruss] 25/11/2024 14:08

Bear in mind that the 40,000 is from running 2 shifts.
The first milestone is to see them exceed the previous manufacturing capacity of 10,000 per month.

[tom5boy] 25/11/2024 13:09

On the 25th March 2025.

IMHO

[chrysalis99] 25/11/2024 09:17

Would love to see Dowgate's 2026 forecast. It's a March year end, so can't be too long to wait. When will they hit an actual roll-out rate of 40k units per month (rather than just having the capacity to do it) I wonder?