Pay-as-you-go insurer Zego eyes Irish expansion after $42m fundraise

Pay-as-you-go insurer Zego has said it is looking to further expand in the Republic of Ireland after securing $42 million (€37.5 million) in a Series B funding round.

Zego, which entered the Irish market last September, offers commercial insurance options for those working in the so-called “gig economy”. The insurtech start-up, whose technology platform integrates with those developed by companies such as Deliveroo, JustEat and UberEats, provides by-the-minute cover for food-delivery couriers and ride-hailing drivers who use their own transportation for work.

The company recently appointed Don McCormack as its country manager for the Republic as it looks to roll out a number of new products locally.

Speaking to The Irish Times, Mr McCormack said Zego was increasingly looking beyond partnering just companies working in the gig economy.

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“We’ve had huge success in the commercial fleet sector in the UK through partners such as WeFlex and think we could enjoy similar success with this in Ireland. We’re currently speaking with potential partners to roll out that model locally,” he said.

“We are also looking at the Irish taxi market, which in my opinion is an area that has been underserved. There is a lot of work we can do there working with partners and customers to build a fairer product in the sector,” Mr McCormack added.

Backers

Zego's latest investment announcement is one of the largest ever funding rounds recorded for a European insurtech start-up. The investment was led by Target Global with other backers including TransferWise founder Taavet Hinrikus, who has joined the company's board. The start-up, whose other backers include Balderton Capital, has raised more than €51 million since it was founded in 2016.

The latest investment comes amid a strong period of growth for the company which said it had grown 900 per cent over the past 12 months.

The company said it is using the funding to enhance its tech platform, to launch operations in several more European countries by the end of 2019, and to add to its current bases in the Republic of Ireland, Britain and Spain.

Zego said it plans to increase its workforce from 75 to 150 in the coming years, with the company looking to hire a number of engineers, data scientists, and specialists in operations and pricing.

Mr McCormack said reaction to the company’s products locally had been “very positive”. The company is underwritten by La Parisienne Assurances, which is regulated by the Central Bank of Ireland.

The company has provided protection to more than 34,000 vehicles since it was established.

"When we built Zego from scratch three years ago, our mission was to transform the insurance sector by creating products which truly reflected the rapidly changing world of transport. We've already come a long way since then, and the latest funding round paves the way for an exciting new chapter as we expand through Europe," said co-founder and chief executive Sten Saar.

“The world is becoming more urbanised and because of this, we are moving from traditional ownership of vehicles to shared usership. This means that the rigid model of insurance that has existed for hundreds of years is no longer fit for purpose. We are extremely proud to be at the forefront of change,” he added.