London-based insurtech firm Zego has raised $42million in one of the largest funding rounds for a European insurtech startup.
The proceeds of the round will be used to fuel Zego’s expansion across Europe and double its workforce. The Series B investment was led by pan-European investment firm Target Global, specialists in the fintech and mobility space, with other backers including TransferWise founder Taavet Hinrikus.
Zego has now raised more than $51million, with new investors Latitude joining existing backers Balderton Capital and Tom Stafford of DST Global to participate in the latest funding round. Target Global’s Partner Ben Kaminski and Taavet Hinrikus join Zego’s board. The investment comes amid an exponential growth period for the company, which has grown 900% over the past 12 months.
The company will use the investment to enhance its tech platform and launch operations in several more European countries by the end of 2019, adding to its current bases in the UK, Ireland and Spain. To enable this rapid growth, Zego plans to increase its workforce from 75 to 150, with the company looking to hire engineers, data scientists, and specialists in operations and pricing.
Zego was founded in 2016 to provide flexible insurance for the gig economy and has since expanded its B2B offering to cater to the fast-growing market of new mobility services, such as ride hailing, ride sharing, car rental and scooter sharing. The company offers a range of policies from minute-by-minute insurance to annual cover, providing far more flexibility than traditional insurers, with pricing based on usage data from vehicles.
This approach has already seen the company become hugely popular with scooter and car delivery drivers, plus van and taxi fleets. The firm currently insures a third of the UK’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. We’ve already come a long way since then, and the latest funding round paves the way for an exciting new chapter as we expand through Europe.
“The world is becoming more urbanised 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. We are extremely proud to be at the forefront of change.”
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 UK success mirrored across Europe and beyond in the coming years.”
TransferWise founder Taavet Hinrikus added: “I’ve been following Zego for some time and have been hugely impressed by the team and their ability to rapidly roll out innovative new insurance products and quickly gain market share. This investment will be a springboard for further growth that will see them continue to shake up the insurance sector.”