Pay-as-you go insurtech Zego raises $42 million to fund European expansion
London-based insurtech Zego, a provider of pay-as-you-go insurance for drivers and riders who work flexibly with their own vehicles, has raised $42 million Series B funding from investment firm Target Global, with other backers including TransferWise founder Taavet Hinrikus.
The company will use the investment to fuel its expansion across Europe and double its workforce in engineering and data science teams, as well as specialists in operations and pricing, in order to capitalise on the growing mobility market.
Zego said it is planning to launch operations in more European countries by the end of 2019, adding to its current bases in the UK, Ireland and Spain. It is also looking to enhance its technology platform.
Zego was started by former Deliveroo managers in 2016 to provide flexible insurance for the gig economy and has since expanded its offering to cater to the market of new mobility services, such as ride hailing, ride sharing, car rental and scooter sharing. In November 2017, it raised £6 million in its series A funding from Balderton Capital.
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, who will join Zego's board, 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.”
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.”
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