Zego UK’s first insurtech unicorn after funding at $1.1bn valuation
Zego, a provider of flexible and usage-based insurance, has become the UK’s first insurtech unicorn after raising $150 million at a valuation of $1.1 billion. The London-based business plans to rapidly expand across Europe and into new markets.
Zego will use the latest funding to accelerate its growth in the commercial motor insurance market, and to double its workforce by the end of 2021. It will also continue to invest in technology, following its recent acquisition of telematics company Drivit, to double down on its fleet offering.
“This latest round of funding is a huge milestone for Zego," said Sten Saar, chief executive and co-founder of Zego. "It is a testament to our relentlessly hard-working team and a clear validation of the need for Zego’s products in the market."
The Series C round was led by DST Global, with other new backers including General Catalyst, whose founder and MD Joel Cutler will join Zego’s board.
All of Zego’s existing investors followed on in the latest round, including TransferWise founder, Taavet Hinrikus, as well as Target Global, Balderton Capital and Latitude, amongst others.
Zego has now raised more than $200 million since launching in 2016 and said its latest investment comes during a period of "capital-efficient hyper-growth despite hugely challenging market conditions".
The company’s run rate premiums now exceed well over $100 million.
The insurtech offers a range of cover options from flexible pay-as-you-go insurance to annual policies, and so far, has provided more than 17 million insurance policies and covered more than 200,000 vehicles in five countries.
Saar said: "In the five years since we started Zego, we’ve covered hundreds of thousands of businesses across Europe, whether they be self-employed drivers or riders or whole fleets of vehicles, and this is just the start for us.
“It is clear that the way people use vehicles is undoubtedly changing, and what’s become ever more apparent is that the traditional, rigid model of insurance is no longer fit for purpose. We founded Zego to offer a more effective solution for customers, and with the support of our amazing backers and the work of our team, we are in the best possible position to expand this offering on a global scale.”
Tom Stafford, managing partner of DST Global, commented: “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.”
Joel Cutler, founder and MD of General Catalyst Partners, added: “Zego is one of the most exciting and dynamic start-ups we’ve seen. They have identified the change from ownership to usership of vehicles as a massive opportunity in the insurance market, and I am thrilled to be both joining its board and supporting their team in the journey from European insurtech heavyweight to global insurance company.”
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