Insurtech startup secures $42m for European expansion

London-based insurtech firm Zego has raised $42m in a Series B funding round to boost its expansion throughout Europe.

The investment round, led by investment firm Target Global and with participation from backers such as TransferWise founder Taavet Hinrikus, has brought the startup’s total funding to $51m.

Founded in 2016 to provide flexible insurance for the ‘gig economy’, Zego has since expanded its offering to cater to the growing market of mobility services, such as ride hailing, ride sharing, car rental and scooter sharing.

The firm currently insures a third of the UK’s food delivery market through partnerships with Deliveroo, Just Eat and Uber Eats, and employs 75 people across its bases in the UK, Ireland and Spain.

Sten Saar, CEO and co-founder of Zego, explained: “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.”

As a result of the funding round, Zego intends to bolster its ongoing expansion by launching operations in several more European countries by the end of 2019.

The company also plans to double its workforce as well as enhance its technology platform in order to facilitate the planned growth across Europe.

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.”