London-based startup Marshmallow has raised a $1.2m Seed to provide immigrants and expats with low-cost insurance.
Passion Capital, Investec Bank and a number of angel investors contributed to the round, which will be used to help Marshmallow launch its digital car insurance product for foreign born drivers.
According to Marshmallow, the average foreign-born driver can expect to be quoted prices that are 51% higher than UK born drivers – which could translate to an increase of £300. With around 3.5m drivers in the UK, Marshmallow claims this means migrants are getting an unfair deal from insurers.
Marshmallow was founded by twins Oliver and Alexander Kent-Braham alongside CTO David Goate. Oliver stated that the team has “complete conviction that being born outside of the United Kingdom doesn’t make you a worse driver than somebody born anywhere else in the world and that it is the added complexity of underwriting a foreign born driver that leads to the huge price increase.”
Marshmallow has built a proprietary algorithm that uses data to offer better prices to foreign-born drivers. It recently gained FCA approval and intends to launch later this year, when the company will be accepting European Licences as well as International Licences.
Investec is a South African bank that has previously made TinTech investments in Curve, Monese and Bud. Passion Capital is a London-based VC firm that counts GoCardless, Monzo, Tide, Nested, and Duedil in its portfolio.