Luko Raises $60 Million to Expand Home Insurance

The French company Luko has secured $60 million in a Series B funding round, equivalent to €50 million. EQT Ventures spearheaded this investment, with current investors including Accel, Founders Fund, and Speedinvest also contributing to the financing.

Several private investors specializing in insurance and technology are also participating in this funding, notably Assaf Wand, who co-founded Hippo Insurance.

Luko provides insurance coverage for homes and apartments, catering to both property owners and renters. To date, the company has successfully gained 100,000 customers. The business has experienced substantial growth over the last year, increasing its customer base from 15,000 to 100,000.

Beyond a streamlined sign-up procedure, Luko is continuously improving its insurance offerings to enhance the customer experience. Specifically, Luko is designed to avoid profiting from unearned premiums.

Luko operates with a clear revenue structure. The company retains 30% of each monthly payment, while the remaining funds are allocated to cover claims. This approach prevents the company from constantly seeking to maximize profits from premium charges.

At year's end, customers have the option to donate their share of the remaining 70% to a cause of their choosing. Luko is also a certified B-Corporation.

This business model shares similarities with Lemonade, another insurtech firm that recently became a public company and is preparing to launch operations in France. It will be interesting to observe whether Luko can maintain its growth trajectory with the arrival of Lemonade in the French market.

To accelerate the claims process, Luko utilizes Lydia, a prominent peer-to-peer payment application in France, to provide customers with rapid reimbursement – often within seconds.

Currently employing 85 individuals, Luko intends to broaden its reach beyond France. The company also aims to offer proactive home protection solutions, such as leak-detecting water meters and intrusion-alerting door sensors.