Britain’s Zego valued at more than $1bn after fresh funding

Zego chief executive Sten Saar

Credit: Alun Callender

Commercial motor insurance provider Zego has become the UK’s latest technology “unicorn” with a valuation of more than $1bn (£719m) after raising $150m in funding.

The company, which provides insurance to gig economy drivers as well as fleets of commercial vehicles, is now valued at $1.1bn following the injection of capital from backers including billionaire Yuri Milner’s DST Global fund and General Catalyst.

Chief executive Sten Saar said the company now plans to grow further into Europe and is also considering US expansion.  “We have pretty aggressive plans around international growth, initially around Europe,” he said. “The same problems exist in all of the markets.”

Zego launched in 2016 as an app that allowed Deliveroo riders and Uber drivers to temporarily turn on commercial motor insurance as they worked gig economy shifts. It currently insures around 50pc of food delivery couriers in the UK.

Since it was founded, the company has provided more than 17m insurance policies for 200,000 vehicles and is now targeting the larger commercial fleet sector.

Mr Saar described his business as a “reluctant unicorn,” warning that the “vanity title” can be a distraction rather than a sign of success.

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However, his company has become one of the UK’s fastest growing “insurtech” businesses, with investors keen to back companies in the space in the hope of profiting from the next wave of UK start-up success after the financial technology boom.

The UK insurtech sector is already the largest in Europe. Since 2015 it has attracted $2.38bn in investment and in 2020, 48pc of all investment into European insurtech went to the UK.

Joel Cutler, the managing director of General Catalyst, will join Zego’s board as part of the investment deal. “We are a deep believer in this new generation of insurance companies,” he said, “and Zego is one of the most exciting and dynamic start-ups we’ve seen.”

Existing investors including Wise co-founder Taavet Hinrikus and Revolut investor Balderton Capital also backed Zego in the new funding round.