LONDON, Sept. 8 (Reuters) – Digital auto insurer Marshmallow has raised $ 85 million from investors and valued it at more than $ 1.25 billion, making it the first British unicorn to be founded by black people announced the company on Wednesday.
The early stage funding round was supported by venture capital firm Passion Capital, Investec Bank (INVP.L) (INLJ.J) and reinsurer SCOR (SCOR.PA), Marshmallow said in a statement.
The technology-driven insurer will use the funding to expand into overseas markets and other types of insurance beyond the automotive segment, Chief Executive Oliver Kent-Braham told Reuters.
“We’re looking to Europe now, it’s a huge market to open up. In the UK we’re looking at other personal lines.”
Insurtech, a rapidly growing segment of the financial technology or fintech industry, has benefited from investor interest in startups, with the traditional insurance industry being considered slow to change and adopt technology.
Global Insurtech funding exploded to $ 7.4 billion in the first half of the year, making 2021 a record funding year as early as July, according to a report from insurance broker Willis Towers Watson.
Motor insurers have benefited from the coronavirus pandemic as fewer cars have resulted in less damage due to government bans on the roads.
Marshmallow was founded in 2017 by Kent-Braham, his twin brother Alexander Kent-Braham and David Goate.
Last year it increased its workforce by more than 200% to around 170 people and plans to employ 400 more over the next two years with its funds.
Insurance and technology are both sectors that often lack diversity, but Kent-Braham said the company came in close to 50:50 in terms of the division between men and women, including female software engineers. Almost 20% of the staff were black or belonged to other ethnic minorities.
Marshmallow draws his own insurance and faces legal action by his former insurer Mulsanne. Kent-Braham said the case is still ongoing, but Marshmallow strongly denies all allegations.
The company’s Series B funding round follows a Series A round of $ 30 million in November 2020 in which the company was valued at $ 310 million. Passion Capital, Investec, and SCOR are all existing investors in Marshmallow.
Reporting by Carolyn Cohn; Editing by Jan Harvey
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