A couple of years ago, London-based startup Zego realised gig-economy workers would need insurance, and went on to raise a very healthy £6 million in Series A funding, led by Balderton Capital. Its first products were pay-as-you-go scooter and car insurance for food delivery workers.
It’s now announced a $42 million raise in one of the largest funding rounds for a European insurtech startup, in a Series B investment led by pan-European investment firm Target Global, specialists in the fintech and mobility space, with other backers including TransferWise founder Taavet Hinrikus. The proceeds will be used to for Zego’s expansion across Europe and to increase the workforce from 75 to 150.
The raise takes the firm to a total of $51 million in funding, with new investors Latitude joining existing backers Balderton Capital and Tom Stafford of DST Global. The investment comes as the company claims a whopping 900% growth over the past 12 months.
Zego caters to the new mobility services, such as ride-hailing, ridesharing, car rental and scooter sharing, and offers a range of policies from minute-by-minute insurance to annual cover, providing more flexibility than traditional insurers, with pricing based on usage data from vehicles.
This means it’s become popular with scooter and car delivery drivers, plus van and taxi fleets. The firm currently insures one-third of the U.K.’s food delivery market, largely through partnerships with Deliveroo, Just Eat and Uber Eats.
Sten Saar, CEO and co-founder of Zego, said: “When we built Zego from scratch three years ago, our mission was to transform the insurance sector by creating products which truly reflected the rapidly changing world of transport… The world is becoming more urbanized and because of this, we are moving from traditional ownership of vehicles to shared ‘usership’. This means that the rigid model of insurance that has existed for hundreds of years is no longer fit for purpose.”
Ben Kaminski, partner of lead investors Target Global, said: “With the growth of new mobility services, Zego identified a major gap in the insurance market and created a unique business model to fill it, which the incumbents will find very difficult to replicate. The potential of this company is almost limitless, and I fully expect to see its U.K. success mirrored across Europe and beyond in the coming years.”