It is Alleged that to understand the IoT you need to understand Zenefits

Internet of Things is a buzzword in many board rooms in 2015. Enterprises from logistics to construction to healthcare, are seeing IoT as the source of data-driven cost savings and competitive advantage.

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Zenefits is one of those unicorns media loves to talk about and VCs would crave to fund. Since launching in May 2013, Zenefits reached $20 million run-rate by the end of 2014, and is projected to reach $100M run-rate by end 2015. And it just raised a whopping $500 million series C at a $4.5 billion valuation. Andreessen Horowitz, the famed venture capital firm now lists Zenefits as its largest investment to date.  Zenefits is an insurance broker disguised as free online HR software. The California company offers SaaS HR services to over 10,000 small and medium-sized businesses to help them manage all their HR processes in one place. Best of all it’s free. Zenefits earns commissions on health, dental, vision, life, disability, or any other insurance, every time their SMB customers open up a new health plan or onboard a new employee through its SaaS solution (In the US, every company has to offer their employees minimum health care).  Zenefits adds value in helping small companies manage the complexities of HR. It captures value as an insurance broker.

In essence, Zenefits is an insurance company that offers free SaaS services to acquire customers. SaaS requires low-cost low-touch sales and so Zenefits profits on the delta between the customer acquisition cost (CACs) in the HR and SaaS industries. Of course, Zenefits creates a captive audience which it then can resell into more insurance services and higher profits.   “Our ‘low-touch’ online model exceeded our expectations, affirming the continued health of our core business.  Wired magazine calls Zenefits’ business model “crafty and unusual”; crafty in using indirect models to profit, but as we’ll soon see Zenefits’ cross-industry business model is not unusual, but relatively unknown.

See on Scoop.itInternet of Things – Technology focus


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