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How fast time flies. Just a few weeks ago, on the heels of its announced acquisition by British group Admiral, French insurtech Luko advertised itself through billboards in the Paris metro and felt confident enough to joke about the fact that it once won a \u201cNext Unicorn\u201d award. Fast-forward to this week, and its parent company, Demain ES, will be put for sale via a legal notice in the newspaper<\/a> after Admiral abandoned ship.<\/p>\n What happened in the meantime is a bumpy journey from one offer to the next, until a tribunal pulled the brakes on the roller coaster ride that can\u2019t end soon enough for the 120+ employees whose jobs are on the line. They already know they work for a non-unicorn, but they are now likely very keen to know whether their next employer will be Allianz.<\/p>\n As for policyholders, Luko insists they don\u2019t need to worry, as \u201cLuko Cover, the broker and manager of contracts marketed by Luko, and Luko Insurance AG, the insurer of the Luko Group [are] separate entities [\u2026]. Luko\u2019s insurance and brokerage activities therefore continue to operate normally,\u201d the company said.<\/p>\n However, it won\u2019t be business as usual for Demain following the tribunal\u2019s decision that came to light this week. The startup\u2019s parent company had entered accelerated \u200b\u200bsafeguard proceedings in June; but as a consequence of its insolvency, it will now be under judicial reorganization, a bad omen since this process often ends in liquidation.<\/p>\n Of course, Luko can still be acquired; hence the upcoming notice in the newspaper. But despite the agreement the two companies entered in June of this year<\/a>, it won\u2019t be by Admiral: It is now confirmed that the British insurance group backed down on the deal on October 20.<\/p>\n Admiral was set to pay \u20ac14 million for Luko Cover \u2014 \u20ac11 million outright, plus an additional \u20ac3 million tied to specific milestones. This partly explains why the M&A process was bumpy: Luko raised \u20ac72 million<\/a> during its solo journey, and it is easy to see how debtors may have been hard to accommodate. However, our understanding is that the main twist was Admiral\u2019s withdrawal.<\/p>\n There may not be a single reason why Admiral threw in the towel, and macro context may have played a role. But according to court proceedings, Admiral rather blamed a \u20ac2.3 million disagreement that emerged during due diligence on how to account for insurance premiums collected by Luko Cover on behalf of insurers, while the prospect of a VAT redress also raised eyebrows. TechCrunch reached out to Admiral and its French subsidiary, L\u2019Olivier, for confirmation, but didn\u2019t hear back.<\/p>\n Regardless, Luko was surprisingly fast in finding an alternative, court documents revealed. On November 8, it received a formal offer from Allianz for the same assets that Admiral was set to acquire \u2014 but without any commitments on the HR side.<\/p>\n While Allianz\u2019s offer didn\u2019t come with a guarantee to save jobs at Demain and its subsidiaries, it seemed to make sense at a strategic level. Indeed, the insurance incumbent is getting ready to launch<\/a> a DTC insurtech platform in France called Allianz Direct. Meanwhile, even Luko\u2019s detractors acknowledged that the company became emblematic of DTC home insurance in France before it expanded further.<\/p>\n As for how much Allianz offered, it depends who you ask; Demain presented the offer as being worth \u20ac14 million in total. The tribunal disputed this and concluded it was worth \u20ac8 million since the remainder would cover debt takeover. But of course, that\u2019s yesterday\u2019s price, not tomorrow\u2019s.<\/p>\n Allianz\u2019s offer to Demain may still stand even with the company under judicial reorganization, but it would be a surprise if the price tag remained unchanged. On the other hand, its perimeter might change, too; Demain is less constrained in its dealings now than when it had to look for a match for Admiral\u2019s offer.<\/p>\n However, there are parts of Luko that are no longer for sale.<\/p>\n Earlier this year, German insurer Getsafe already nabbed the German customer portfolio that was mostly a legacy of Luko acquiring multi-product insurer Coya<\/a> in 2022.<\/p>\n In addition, while Luko entered the unpaid rent insurance business with the acquisition of Unkle<\/a> that same year, that portfolio has now been acquired by French broker Solly Azar<\/a> in partnership with Sada Assurances. Both acquirers confirmed that these deals are closed and independent from Demain\u2019s judicial proceedings.<\/p>\n Still, Luko might be able to sell more than what Admiral was interested in buying. But we are more curious to know who will buy Demain; will it be Allianz, which even offered Demain a \u20ac25,000 daily advance payment to keep the company afloat? Or could it be another of the prospective buyers whose names have been floated at some point, such as AXA, Ornikar or Leocare?<\/p>\n The worst-case scenario would be for all offers to vanish. If that were to happen, some may wish the court had been more flexible in light of Allianz\u2019s offer. Its latest decision was already somewhat of a surprise for Luko, a source close to the matter told TechCrunch. But from a legal standpoint, it seemed unavoidable; in French law<\/a>, safeguard proceedings don\u2019t apply to companies that are insolvent, as Demain now is.<\/p>\n Even if the tribunal had some leeway, it probably wouldn\u2019t be keen to set a precedent, especially at a time when bankruptcy-related proceedings become more common. Earlier this month, French mobility startup Cityscoot<\/a> declared itself insolvent<\/a> and was subsequently placed under judicial reorganization<\/a>. Maybe it will come out on top, and Luko might, too; but knowing the odds, not all companies will, even if they were once future unicorns.<\/p>\n Update: Admiral replied to TechCrunch on Nov. 23 with the following statement: \u201cAdmiral had intended to purchase Luko\u2019s French household business. Unfortunately, they were unable to meet the conditions set out in the transaction documents and the parties were unable to reach an agreement to enable this deal to complete.\u201d<\/em><\/p>\n It is unclear whether Luko will publicly challenge this statement and Admiral\u2019s decision, but a source close to the matter told TechCrunch Wednesday that rather than litigation, Luko\u2019s priority was to put an end to the proceedings, which have been hard on its employees.<\/em><\/p>\n Since then, the Luko employee representative that attended the hearing also clarified that Allianz\u2019s offer included integrating the same number of employees that Admiral would have \u2014 some 130 staffers; our understanding is that the court\u2019s comment noting that the potential buyer wasn\u2019t making any commitments on the HR side therefore applied to what might have happened in the longer run.<\/em><\/p>\n<\/p><\/div>\n