One of the most significant players in the UK’s fintech industry, the insurtech sector has emerged as a clear winner. Even amid a myriad of economic disruptions caused by the pandemic, the sector has been reaping huge investments.
Adding to this intense competition in the sector is London-based digital motor insurance startup Marshmallow which has raised $85 million in a funding round that valued the company at $1.25 billion – making it Britain’s first and UK’s second unicorn to be founded by people of black heritage, following in the footsteps of WorldRemit.
The high-profile backers include Passion Capital, Investec and Scor.
Using data for more affordable insurance
Established in 2017 by identical twins Oliver and Alexander Kent-Braham along with David Goaté, the platform’s founding purpose was to modernise the insurance industry with the ultimate aim of using data to provide more affordable insurance to customers who fall outside the typical “good risk” profile.
The business’ innovative use of technology, big data and artificial intelligence has enabled it to grow into a serious challenger brand that aims to be one of the largest players in the insurance industry. It is one of just two UK ‘insurtechs’ to have secured an insurance licence, allowing it complete flexibility from quote to claim.
Marshmallow’s unique approach, comprising fair pricing, quick and efficient customer service and no charge for changes made to a policy, has driven growth of over 100% during the last six months with the company having sold well over 100,000 policies. The business’ headcount has also increased by more than by 200% in the past year, and with fresh funding, it expects to hire 400 people over the next 24 months. The Series B will also be used by Marshmallow to expand into other countries, continue to hire the best talent and build other products.
Its Series B raise closely follows its Series A round, which closed in November 2020 and secured the company $30m in funding. The company has raised a total of $120m since it was founded.
$5-trillion market globally
Commenting on the raise, Oliver Kent-Braham, Co-founder and CEO of Marshmallow, said: “Customers are voting with their feet – and they clearly want a modern insurance offering. We’ve only just scratched the surface of disrupting a market worth $5 trillion globally, and there’s so much more we’re planning to do in the coming years. We look forward to building more products that help people in their time of need.”
Eileen Burbidge, Partner at Passion Capital, added: “The traction the team has achieved demonstrates the demand for a new kind of insurance provider, one that focuses more on consumer experience and uses the latest technology and data to give fair prices. We’ve been proud to support the team’s ambitions since the start, and now look forward to its next chapter in Europe as it continues its mission to change the industry for the better.”