Zego Raises $150M at $1.1B Valuation

Zego Secures $150 Million in Funding

Zego, an insurtech firm initially focused on providing adaptable motorbike insurance solutions for gig economy participants, has successfully raised $150 million. The company has since broadened its offerings to encompass a comprehensive suite of technologically advanced commercial motor insurance products.

Investment Details and Valuation

This funding round, a Series C, was spearheaded by DST Global. The investment has propelled Zego to a valuation of $1.1 billion, officially achieving unicorn status.

General Catalyst is among the new investors, with founder and Managing Director Joel Cutler now serving on Zego’s board.

Continued Investor Confidence

Significantly, all pre-existing investors participated in this round. These include Taavet Hinrikus of Wise, also a Zego board member, alongside Target Global, Balderton Capital, and Latitude. To date, Zego has accumulated over $200 million in funding since its inception in 2016.

Plans for Expansion and Growth

The company intends to utilize these funds to facilitate a swift expansion throughout Europe and into new international markets. Furthermore, Zego plans to double its current workforce of 265 employees to over 500 by the close of 2021.

Continued investment in technological advancements is also a key priority, building on the recent acquisition of telematics company Drivit.

Zego’s Insurance Offerings and Technology

Zego provides commercial motor insurance tailored for businesses, ranging from independent drivers and riders to large vehicle fleets. Its product range includes pay-as-you-go insurance options alongside traditional annual policies.

The company leverages technology and integrates diverse data sources to deliver insurance products designed to be both time-saving and cost-effective.

Having obtained its own insurance license in 2019, Zego is now capable of independently developing and distributing its own policies, in addition to collaborating with established insurance providers.

Key Integrations and Partnerships

Zego maintains technical and data integrations with prominent companies in the ride-hailing sector, such as Uber, Ola, and Bolt. It also partners with leading delivery services, including Deliveroo, Uber Eats, and Just Eat.

More recently, the insurtech has become a crucial partner in the rapidly expanding U.K. e-scooter rental market, collaborating with companies like Tier, Voi, and Dott.

Focus on Fleet Insurance

The company is now heavily focused on providing insurance solutions for fleets. According to Sten Saar, CEO and co-founder of Zego, 80% of newly sold vehicles are now purchased by commercial entities.

Saar explains this shift represents both a natural evolution for the company and a deliberate strategy to capitalize on a growing market currently lacking adequate insurance coverage.

Company Performance and Data Advantage

To date, Zego has issued over 17 million insurance policies and provided coverage for more than 200,000 vehicles across five countries.

Unlike many traditional insurers who base pricing on factors like age and vehicle type, Zego incorporates driver behavior and working habit data into its risk assessment.

Zego collects five times more data per vehicle than its competitors, amounting to 50 data points per second. This extensive data collection allows for a more thorough understanding of risk, enabling the provision of competitively priced insurance coverage, ranging from hourly to annual policies.

Statement from DST Global

Tom Stafford, Managing Partner of DST Global, stated: “The insurance industry, like many others, is undergoing a significant transition to digital platforms. We are pleased to support Sten and the Zego team as they utilize internet technology, telematics, and data-driven insights to deliver superior insurance products at optimal prices for their customers.”