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Insurance startup Marshmallow becomes the first black-owned unicorn in the UK

Marshmallow co-founders Alexander and Oliver Kent Braham.

marshmallow

London — According to data firm CB Insights, $ 1 billion start-ups are no longer uncommon. list Over 800 privately held technology companies worldwide with a valuation of over $ 1 billion.

But marshmallows, a London-based digital insurance platform, are so rare. Founded in 2017 by mixed-race identical twins Oliver and Alexander Kent Braham, the company is the first black-owned company in the UK to reach the coveted position of a “unicorn.”

Marshmallow CEO Oliver Kent Braham told CNBC in an interview that he was “quite surprised by this fact.”

This reflects the ongoing lack of diversity in the technology industry. In the UK, between 2009 and 2019, only 1.6% of venture capital funding went to founding teams of all ethnic groups, while only 0.2% of funding went to black entrepreneurs, according to Extend Ventures. ..

Kent-Braham believes it is due to the idea of ​​venture capital. He said that many tech investors ignore cold email and only favor the founders they know through their colleagues.

“VCs really need to look a little wider,” a 29-year-old entrepreneur told CNBC.

“The number of times the VC said:” I don’t respond to cold emails because you should be able to hustle and introduce me. ” If you know, it’s much easier to hustle and introduce you. “

Marshmallow, a Kent-Braham company, raised $ 85 million in a funding round and valued the company at $ 1.25 billion. Cash was raised only from existing investors such as Passion Capital, an early investor in digital bank Monzo, and a South African bank. Investec And French reinsurance company Squall..

The Kent-Braham brothers manage most of their businesses even after the latest investment round. The pair co-founded Marshmallow with software engineer David Goaté, who previously worked with London startup Yoti.

Insurance is digitized

Marshmallow is a digital-only insurance company. The company has started to provide automobile insurance mainly to expatriates. Foreigners often face higher rates from traditional insurance companies.

Authorized by the Financial Conduct Authority in the United Kingdom, the company advertises using machine learning to tailor policies for its customers as a key advantage for existing companies in the following industries: Admiral When Axa..

“We’re trying to take on people and digitize everything with more data than our competitors,” says Kent Braham. “We need to hire about half of what our competitors need to hire to support our customers. We believe we are in a really good place to gain market share.”

With more than 100,000 registered customers, Marshmallow plans to launch other products and expand throughout Europe.

The insurance technology, or insurance technology market, saw a surge in investment this year after the Covid-19 pandemic accelerated the shift of consumer behavior to online services.

Zego, a UK commercial car insurance company focused on the gig economy, raised $ 150 million in March at a valuation of $ 1.1 billion. Wefox, a German insurance company, earned $ 650 million in its June investment round, valuing the company as $ 3 billion.

Marshmallow funding also highlights the recent flood of capital into the European tech industry.European tech companies are already I collected more money this year Than they did throughout 2020.

Insurance startup Marshmallow becomes the first black-owned unicorn in the UK

Source link Insurance startup Marshmallow becomes the first black-owned unicorn in the UK

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