Insurtech company Marshmallow, has become Britain's second black-founded tech unicorn following its latest funding round.
The London-based firm, which provides a digital car insurance platform, raised $85m (£61m) from existing investors in the Series B funding round, valuing the company at $1.25bn.
Companies with a valuation of at least $1bn are granted “unicorn” status.
Founded in 2017 by identical twins Oliver and Alexander Kent-Braham with David Goaté, Marshmallow aims to modernise the insurance industry by using data to provide more affordable insurance to customers who fall outside the typical “good risk” profile. These often include immigrants, expats and people travelling within the UK.
Its use of technology, big data and artificial intelligence has allowed the company to serve more than 100,000 customers to date. It is one of just two UK insurtechs to have secured an insurance licence, allowing it complete flexibility from quote to claim.
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The company has expanded its staff by more than 200% in the past year to around 170 employees, and expects to hire 400 people over the next 24 months. It will use its most recent funding to expand into overseas markets and into other types of insurance beyond the motor segment.
“Customers are voting with their feet — and they clearly want a modern insurance offering,” Oliver Kent-Braham, co-founder and chief executive of Marshmallow, said.
“We’ve only just scratched the surface of disrupting a market worth $5trn globally, and there’s so much more we’re planning to do in the coming years. We look forward to building more products that help people in their time of need.”
Eileen Burbidge, partner at Passion Capital, said: “The traction the team has achieved demonstrates the demand for a new kind of insurance provider, one that focuses more on consumer experience and uses the latest technology and data to give fair prices.
"We’ve been proud to support the team’s ambitions since the start, and now look forward to its next chapter in Europe as it continues its mission to change the industry for the better.”
Marshmallow was pipped to the post of becoming the UK’s first black-owned unicorn by startup Zepz, which achieved a $5bn valuation in an August financing round. The company, which was previously known as WorldRemit, transfers money and was founded by Somali-born entrepreneur Ismail Ahmed.
It comes as just 1.6% of venture capital funding in the UK went to all-ethnic founding teams between 2009 and 2019, according to data from Extend Ventures, while only 0.2% of funding went to black entrepreneurs.
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