UK-based Insurtech Zego has closed on a $42 million Series B funding round which is said to be the largest ever for a European based Insurtech startup. In total, Zego has now raised $51 million. Zego says its company has grown over 900% in the past 12 months.
The round was led by Target Global but included some other high profile names like TransferWise founder Taavet Hinrikus, who is joining the Zego board, Tom Stafford of DST Global, and an investment from LocalGlobe’s new fund ‘Latitude.’
According to a note from the company, Zego was founded in 2016 to provide flexible insurance for work platforms like Uber and Deliveroo. Since platform launch, Zego has expanded its offerings to provide insurance to other industries. Zego 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 is apparently “hugely popular.”
Zego plans to expand to several more European countries this year, and ultimately plans to go global. By the end of 2019, Zego says it will add to its current bases in the UK, Ireland, and Spain.
To facilitate its expansion, Zego will double its workforce from 75 to 150.
Sten Saar, CEO and co-founder of Zego, commented on the funding round:
“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, believes that 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.
“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.” commented TransferWise founder Taavet Hinrikus.