Ondo InsurTech Scales Up with Nationwide LeakBot Rollout for 5M Homes

Highlights:

• Expansion into 16 US States: Ondo InsurTech's partnership with Nationwide Mutual will see its LeakBot device rolled out across 16 US states following a successful pilot.
• Addressing Costly Water Damage: LeakBot’s early detection technology helps mitigate significant water-related damage, a top concern for insurers, providing a critical cost-saving solution.
• Rapid US Growth and Strong Market Response: With five major US insurers onboard, Ondo's shares have surged, reflecting strong investor confidence in its expansion strategy.

Ondo InsurTech PLC (LSE:ONDO) has marked a significant milestone in its growth trajectory, announcing an expanded partnership with Nationwide Mutual Insurance to roll out its LeakBot water leak detection device across 16 states in the US. The decision comes after a successful pilot program, cementing a strategic step forward for Ondo's expansion in the American market.

Nationwide Rollout: A Major US Expansion

Nationwide Mutual, one of the largest insurers in the United States, will offer the LeakBot device to both new and existing policyholders at no cost. This initiative forms part of Nationwide’s broader Smart Home Program, aimed at reducing claims by incorporating advanced technology solutions.

LeakBot, a compact and innovative device, attaches to a home’s main water pipe and continuously monitors for hidden leaks. By detecting issues early, the device alerts homeowners via smartphone notifications, allowing for prompt action before minor leaks escalate into major, costly repairs. Water-related damage accounts for 20-30% of insurance claims annually, costing billions in both the US and UK markets combined. LeakBot’s ability to prevent such damage makes it a valuable addition to Nationwide’s portfolio.

A Strong US Momentum

Ondo’s latest report highlights a growing customer base of 114,000 registered users, with its expansion in the US showing the most significant momentum. In addition to Nationwide, Ondo has partnered with four other major US insurers, broadening its market reach. According to the company’s recent presentation, these partnerships open access to an addressable market of over 5 million homes.

The success in the US builds on Ondo’s existing operations in the UK, Sweden, and Denmark, where it has formed strategic partnerships with leading insurers like NFU Mutual. However, the US market remains the focal point of Ondo’s growth strategy, given the scale and opportunities it presents.

Revenue Model: Building Recurring Income Streams

Ondo’s business model combines a one-off fee for its LeakBot technology with ongoing service charges for software, maintenance, and repairs. This approach provides a stable and predictable recurring revenue stream, which is expected to drive sustained growth and resilience over time.

Earlier this year, Ondo secured over £4 million in new funding to accelerate its expansion in the US. The capital has been allocated to scaling operations, setting up a support centre, and boosting production capacity to meet the rising demand driven by these strategic partnerships.

Investor Confidence and Market Response

The announcement of the expanded partnership with Nationwide has sparked renewed optimism among investors. Ondo’s share price jumped by 10% following the news, continuing an upward trend that has seen the stock rise by 88% in the past month. This surge reflects the market’s positive reception to Ondo’s US growth strategy and its potential to capture a significant share of the smart home insurance market.

Mark Wood, Ondo’s chairman and a seasoned insurance industry leader, expressed his optimism about the partnership’s impact: “We are delighted that our relationship with Nationwide has evolved into something much more substantial. This builds on several important contracts we have secured in the US.”

Wood emphasized that Nationwide’s reputation as an innovative insurer was a key factor in the expansion: “Their commitment to integrating smart home technologies aligns perfectly with our vision. LeakBot’s unique capabilities and global patent protection make it a valuable tool for insurers facing the challenge of mitigating water damage, which remains the largest category of household claims worldwide.”

Scaling Production to Meet Demand

In preparation for the expanded rollout, Ondo has increased its production capacity, ensuring it can meet the expected demand from Nationwide’s extensive customer base. The company’s proactive approach to scaling operations has been instrumental in executing this rapid growth plan without straining its working capital.

Outlook: Paving the Way for Further Growth

As Ondo continues to gain traction in the US, the partnership with Nationwide serves as a strong endorsement of its LeakBot technology. With substantial market potential and a clear pathway for growth, Ondo is well-positioned to capitalize on the increasing demand for smart home solutions in the insurance sector.

Looking ahead, the company aims to further expand its footprint, leveraging its existing relationships with insurers and exploring new market opportunities. By focusing on early intervention technologies that offer tangible cost savings, Ondo InsurTech is setting the stage for sustainable growth and establishing itself as a leader in the smart home insurance market.