Insurtech Zego secures £6m to insure gig economy
Pay-as-you go insurance provider Zego has raised £6 million in series A funding from Balderton Capital, as the startup gets ready to launch new products for flexible workers employed in the sharing economy.
London-based Zego was started by former Deliveroo managers in 2016 and will use the funding to hire more specialists for its engineering team, as well as staff to build key business functions. The startup is on the verge of launching a suite of insurance products for self-employed people, including those working in the so-called gig economy. It is also looking to expand internationally in the next six months, according to a statement.
Zego aims to fill the gap created by platform businesses such as Deliveroo, Quipup, Uber and Uber Eats, which do not consider their workers to be employed. Platform businesses have been under scrutiny following a series of employment tribunals and court cases which have questioned the nature of the relationship between the platforms and people who work with them.
At present Zego provides specialist pay-as-you-go insurance to delivery drivers using cars and scooters for food delivery. In 2018 Zego is focused on delivering a range of additional benefits to support the self-employed worker, along with alternative vehicle products. Zego is also working on a tracking-based product that will make it possible for safer drivers to pay less overall.
All of Zego’s insurance products are based on the principle that drivers should pay only for the hours that they are actually driving the car, van or scooter. All car, motorbike and scooter drivers are required by law to be insured for the periods that they are delivering, but the expense and difficulty of buying a policy can be a sticking point in signing up new drivers. Before Zego launched in the market there were only annual policies available.
Harry Franks, CEO at Zego, commented: “Zego provides hardworking drivers with the tools to make gig economy jobs work for them. Before we came along drivers who wanted to work flexibly and part-time were ill-served by the insurance industry and were forced to pay for insurance cover they did not use. We’re delighted that Balderton wants to work with us as we develop pay-as-you-go policies for the fast-growing numbers of self-employed and sharing economy workers.”
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