Zego, the insurtech that got its start by offering flexible motorbike insurance for gig economy workers but has since expanded with a range of tech-enabled commercial motor insurance products, has raised $150 million.
Leading the London-based company’s C round — giving it a $1.1 billion valuation and a unicorn status — is DST Global. Other new backers include General Catalyst, whose founder and MD, Joel Cutler, joins Zego’s board.
Notably, I’m told all existing investors followed on, including Wise’s Taavet Hinrikus, who is also on the Zego board, and Target Global, Balderton Capital and Latitude. Zego has now raised more than $200 million since launching in 2016.
The insurance company says it will use the funding to “rapidly expand across Europe and beyond”. It will also double its workforce, which currently stands at 265 employees, to over 500 employees by the end of 2021, and continue to invest in technology. Late last year, Zeho acquired telematics company Drivit.
Zego offers commercial motor insurance for businesses, from self-employed drivers and riders to fleets of vehicles, spanning pay-as-you-go insurance to annual policies. It combines tech with multiple data sources to offer insurance products that it claims save time and are more cost-effective. It earned its own insurance license in 2019, enabling it to build and sell its own policies, in addition to working alongside other insurers.
Technical/data integrations include those with companies in the ride-hailing space, such as Uber, Ola and Bolt, and in the delivery space, such as Deliveroo, Uber Eats and Just Eat. More recently, Zego has become a key partner in the U.K.’s burgeoning e-scooter rental market, partnering with companies like Tier, Voi and Dott.
Next up, the insurtech is betting big on offering insurance for fleets. “Over the past couple of years, Zego’s focus on powering opportunities for businesses has expanded to include not just self-employed drivers and riders, but also entire fleets of vehicles,” Sten Saar, CEO and co-founder of Zego, tells me, noting that 80% of new vehicles are now sold to commercial customers.
“This has been both a natural progression for the company, with the only real difference being distribution, as well as a focused effort, as Zego aims to capitalise on an ever-growing market currently underserved by the insurance sector”.
To date, Zego has provided more than 17 million insurance policies and covered more than 200,000 vehicles in five countries.
“While most traditional insurers price their insurance products based purely on factors such as age and vehicle type, and while others may use telematics-based driver behaviour data too, Zego is able to price policies based not only on traditional factors, but also driver behaviour data and working habits data,” adds Saar.
“In fact, overall, the information Zego can collect amounts to five times more data per vehicle than competitors, or 50 data points per second. This means that we have a much more comprehensive understanding of risk than competitors, enabling us to provide best-value insurance coverage, from policies ranging from one hour to one year”.
Cue statement from Tom Stafford, managing partner of DST Global: “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.”