London-based digital insurance platform Marshmallow, which was founded in 2017 by mixed-race identical twins Oliver and Alexander Kent-Braham, has nearly tripled its sales, The Standard reports.
The platform says that the company “saw turnover climb 175% to £22.9 million [$28m] in 2022, while profits jumped to £709,000.” Also, the company reveals it “had so far sold over 342,000 policies, with over 300,000 downloads of its app and more than £66 million paid out in claims.”
Marshmallow became the second Black-owned company in Britain to reach the coveted status of “Unicorn.” This was after the company raised $85 million in a funding round, taking the company’s value to $1.25 billion. The funding round came from Passion Capital, which invested in banking firm Monzo, as well as South African bank Investec (INVP.L), and French reinsurer Scor (SCR.PA).
Firms with a valuation of $1 billion and above are given a “unicorn” status. The first Black-owned company to reach that status in Britain is Zepz, a money-transfer firm that achieved a $5 billion valuation in a financing round.
“Customers are voting with their feet — and they clearly want a modern insurance offering,” said Oliver Kent-Braham, co-founder and chief executive of Marshmallow.
“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.”
Marshmallow is a digital car insurance platform that provides insurance mainly to expats. The company says expats usually face higher charges from traditional insurers. According to the company, it has more than 100,000 customers on its database and uses Artificial Intelligence to serve its customers. Also, Marshmallow is one of just two insurtech companies in the UK to have secured an insurance license.
CNBC reported that insurtech firms saw a surge in market investment in 2021 after the Covid-19 pandemic accelerated a shift in consumer behavior toward online services. Aside from Marshmallow and Zepz, CNBC reported that a U.K. commercial motor insurer focused on the gig economy, Zego, raised $150 million at a $1.1 billion valuation in 2021. Also, German insurance start-up Wefox raised $650 million in a funding round that year valuing the company at $3 billion.
According to the Harvard Business Review, Black founders receive less than 1% of venture capital, therefore the Black Founders Fund was created to address challenges with VC funding for Black-owned businesses.