Our CEO and Co-founder Hedi, recently visited podcast Algorütm, where she talked about her background and how Cachet was founded.
For all of our Estonian friends, you can listen to the podcast down below. But for all the others we put together this blog that goes over the main talking points.
Link to the episode: https://player.captivate.fm/episode/3a070784-4eb9-4611-b9cf-983e72ab70bd
Algorütm is the most popular IT podcast here in Estonia. With listeners and contributors across the world of data, engineering and product development.
It’s led by three of the top names in their field Priit Liivak, Erik Jõgi and Martin Kapp. Weekly, they share stories from developer to developer, covering different businesses and topics.
How well do you know Cachet’s founder and CEO?
Hedi started off by introducing herself and her background to Priit and Martin. Explaining how she started her career at HansaWorld, before spending time in sales and after that in Swedbank leading IT&Risk communications across the Baltics and later the wider Nordic Baltic group. She also has been Chief Communication and Marketing Officer at Starman Group.
But, after some time she started to feel the pull to build something of her own. After dipping her toes into founder life with some consulting work, providing strategic communication, branding, and business development services, she then co-founded Cachet with Kalle Palling.
Eight years on she makes clear how the problems they saw in the market remain alive and relevant to Cachet today.
The Problem Cachet Was Founded to Solve
Hedi comes from a data-heavy background. This has made her notice how companies collect data and use it to sell better to people or protect themselves against potential risks.
She saw that often companies would mis-profile her and other people in an unfair way. Especially in the insurance and banking industries. People get misjudged on only age, education and location rather than actual responsible behaviour, which is a lot more insightful data to collect.
Around 2018, the rising tide of digital services and platforms were emerging and reshaping commerce and mobility. The implementation of GDPR laws was opening the conversation about how personal data should flow and who should benefit from the way their data is stored and used. The first Cachet product was a mock-up on how to use personal data in all your personal insurance products. We decided this was a bit too broad to start with.. But one day we will come back there.
We noticed that the platform economy is fully digitised with usage patterns, driving behaviour and timing, yet largely unused by insurers. It was a place to connect data and money in a way that nudges people toward safer behaviour.
How Cachet Product Has Evolved
After having a clear problem in the market to solve, Cachet started as an insurance product for ride-hailing app drivers. Tackling a clear use-case in the wider platform economy they looked to enable.
Cachet did this by using usage-based methods to create a more behaviourally specific framework for solution development. From there they expanded the product to solve for more cases, including fleet operators and digital platforms running car-sharing and micromobility.
The path has been putting behavioural data to work for more equitable outcomes. Looking not just at trip volume and not only how much someone drives but when and how, including speed, harsh cornering, acceleration, etc. Collecting and mixing data from multiple sources.
The next step from there is to do individual-level modelling to identify personal risk patterns. Hedi gave the example to Priit and Martin of looking at driving right after a holiday or with the first icy days in January. How this pattern spotting logic helps to prevent any possible accidents from happening. The same approach helps to do the fleet-level modelling, identifying systemic risk windows like most accidents clustered on Friday/Saturday nights near nightlife districts.
With this data, Cachet looks to suggest tailored interventions for platforms that transform their risk profile into a dynamic asset they can manage during the course of their policy lifecycle. Such as slowing scooters down, relocating them, or otherwise intervening during specifically identified moments by Cachet.
Not only offering reactive fixes, but proactive insights that protect riders and help companies make better decisions.
How Europe’s Fragmentation Impacts Cachet
Cachet is trusted by digital platforms in 16 countries across Europe. With an insurance license to operate across the region, we understand what it takes to scale across different national requirements and regulations.
Fragmented corporate law across EU member states creates real costs for scaling companies. Cachet is a direct case study of the problem, joining the Techstars accelerator meant choosing between the US, UK or Ireland, setting up an Irish holding, which added over €100,000 in costs with no real upside.
The ‘28th regime’ EU Inc initiative moves towards harmonising corporate law, with tax and labor law as sticking points. Some advice Hedi shared for others who are operating all over Europe is to look at the digital-divide map across countries.
How does Cachet approach scaling?
Hedi opened up about how Cachet has stayed deliberately lean early on. Since insurance data models need around 3 years of real claims data before they become reliable, scaling headcount before the model works is wasted spend.
Today Cachet has around 30 people in total, with 12 nationalities represented. Currently, the team is scaling up rapidly since the core infrastructure and pricing logic are considered proven and scalable.
Want to be part of the team? Have a look at Cachet's open roles here.
