When it comes to insurtech fundraising there is no shortage of cash in this pandemic-affected world. No siree. While Elon Musk casually gambles billions on Bitcoin, Zego and other insurtech pioneers are building the future of PAYG insurance. There are plenty of investors willing to back those new ideas and new products. Here’s the latest funding news.
Commercial motor insurer Zego has become the UK’s first insurtech unicorn after raising $150 million, valuing the company at $1.1 billion. The London-based business, which combines best-in-class technology and sophisticated data sources to better understand risk, will now accelerate the expansion of its product offering across Europe and beyond.
The latest round of funding, and the largest ever raised by a UK-founded insurtech, was led by DST Global and includes other new backers such as General Catalyst, whose founder and MD, Joel Cutler joins Zego’s board. All of Zego’s existing investors followed on in the latest round, including TransferWise founder, Taavet Hinrikus, also on Zego’s board, as well as Target Global, Balderton Capital and Latitude, amongst others.
Zego has now raised more than $200 million since launching in 2016 and this latest investment comes during a period of capital-efficient hyper-growth, despite hugely challenging market conditions, with the company’s run rate premiums exceeding well over $100 million.
Zego will use the latest round of investment to rapidly accelerate its growth, starting with an expansion into new markets and deeper penetration across Europe. It will continue investing in technology, following its recent acquisition of telematics company, Drivit, and will double down on its fleet offering, recognising changes in consumer behaviour that are driving an increased demand for new mobility services. Zego will also continue to invest in its team, especially across product, engineering and data science, as it aims to double headcount by the end of 2021.
Zego is a commercial motor insurance company that powers opportunities for businesses, from self-employed drivers and riders to entire fleets of vehicles. It combines advanced technology with multiple data sources to offer insurance products that save businesses time and money. Zego offers a range of cover options from flexible pay-as-you-go insurance to annual policies, and so far, has provided more than 17 million insurance policies and covered more than 200,000 vehicles in five countries.
Sten Saar, CEO and Co-founder of Zego, said: “This latest round of funding is a huge milestone for Zego. It is a testament to our relentlessly hard-working team and a clear validation of the need for Zego’s products in the market. That being said however, we see this investment as simply another step in our journey towards powering opportunities for businesses across the world. In the five years since we started Zego, we’ve covered hundreds of thousands of businesses across Europe, whether they be self-employed drivers or riders or whole fleets of vehicles, and this is just the start for us.
“It is clear that the way people use vehicles is undoubtedly changing, and what’s become ever more apparent is that the traditional, rigid model of insurance is no longer fit for purpose. We founded Zego to offer a more effective solution for customers, and with the support of our amazing backers and the work of our team, we are in the best possible position to expand this offering on a global scale.”
Tom Stafford, Managing Partner of DST Global, said: “We have been following Zego since inception, and continue to be impressed by the development of the team, product and customer proposition. The shift to digital is occurring across multiple industry categories and is increasingly occurring in the insurance industry. We are excited to partner with Sten and the team at Zego as they leverage internet, technology, telematics and data-driven decisions to provide the best insurance products at the best pricing for their customers.”
Joel Cutler, Founder and MD of General Catalyst Partners, said: “We are a deep believer in this new generation of insurance companies, and Zego is one of the most exciting and dynamic start-ups we’ve seen. They have identified the change from ownership to usership of vehicles as a massive opportunity in the insurance market, and I am thrilled to be both joining its board and supporting their team in the journey from European insurtech heavyweight to global insurance company.”