How a Cork startup was launched and then sold... in about six months

ASK ALMOST ANY entrepreneur, and they will tell you that starting a successful business is one of the hardest things that you can do.

Getting it to a point where someone wants to buy it is even harder, and often takes years of toil to achieve.

Not so for Paul Prendergast, who started his tech company, Cork-based Blink Innovation, at the end of October 2016.

Earlier this month he sold the business to UK-based CPP group for €1 million, with an earn-out on up to 20% of profits generated — based on a maximum of €20 million in profits — over the next five years.

Insurance company CPP is based in the UK and is listed on the AIM, the junior stock exchange in London, with a market value of around £120 million (€140 million).

The firm acquired Blink before the Irish company had even launched its first product, which will focus on dealing with flight cancellation insurance claims.

Speaking to Fora, Cork native Prendergast said that the firm is “delighted” with the sale and now plans to expand quickly as part of the CPP group.

“They are a very interesting company and have a strong board with great experience. We really like that and we felt that it would accelerate Blink,” he said.

“Fundraising was an option, but that takes a lot of time and the structure of the deal is good so we are highly incentivised.

“Anyone who starts and sells a business within six months has to be happy.”

Planes, trains and automobiles 

Blink has designed a software platform that allows it to sell different types of ‘smart’ insurance products.

The first one that the company is working on is a travel insurance product that would automatically process claims in the event of a flight cancellation, with no paperwork required.

Once the claim is paid out, the company’s software will also provide travellers with different options to travel.

Blink Innovation

“Typically in insurance, you have to prove what happens. Because we are building around data, we know (a cancellation) has happened even before you do,” Prendergast said.

“Consumers don’t want a cheque in the post, they want to get home. The claim we pay can be used to fund your travel.

“Say your Aer Lingus flight is delayed, we would say that British Airways has a seat available. We scan your flights and send you a text that will show you options to get back to Dublin.

“If the airport is shut down we can look at planes, trains and automobiles to get you home.”

Relationships

Prendergast started Blink after leaving Cork firm Inhance Technology, where he had been CEO. He declines to comment on why he left the company but said that they parted on “amicable” terms.

He co-founded Blink with Peter Bermingham in October and worked with an outside tech company to develop the software.

“We bootstrapped it ourselves (and) outsourced everything; we worked with freelancers and with partners,” Prendergast said.

“Then we went out to talk to people, that was it, it isn’t brain surgery. Our approach was that to build a good insurance solution, you needed good insurance partners in place so we worked to build relationships.”

Paul Prendergast

The firm quickly struck an agreement to develop its product in partnership with Munich Re, the world’s largest reinsurance firm, which is also underwriting Blink’s flight-cancellation offering.

Prendergast said that Blink’s partnership with the giant firm “gave people comfort that we could deliver”.

Launch

Blink’s founders had been considering raising cash with further plans to build the product out “over the next three years” when CPP came knocking.

“We were talking to a lot of people commercially and they approached us,” Prendergast said.

“We only started talking to them in the new year, so it happened very quickly.”

The company is planning to launch a website in the coming weeks so that consumers can buy its travel insurance product.

“Initially we will go live with a soft launch in Ireland and the UK, and by the summer we will widen out,” he said.

“In three to four months we would expect to widen across Europe, Asia and then globally. CPP is strong in a lot of emerging markets, like Asia and South America, so they will accelerate our growth. It is one of the reasons why we chose them.”

Blink plans to release more insurance products, with Prendergast saying: “I would expect to see a lot of innovation coming back from Blink as part of CPP in the next 12 months.”

Meanwhile, Prendergast plans to stay at the helm of Blink for the foreseeable future following the sale.

“We are a part of the CPP group, we are delighted to be a part and the plan is to stay there,” he said.