Marshmallow Insurance: The Black-Founded Motor Insurer to Hit Billion-Dollar Valuations and Reach the UK Unicorn Status

The UK-based digital motor insurance company, Marshmallow is one of the rarest billion-dollar start-ups to achieve immense success within a very short period of time. Marshmallow raised $85 million from investors and the company’s valuation in September 2021 became $1.25 billion. This is also the second Back-founded company to reach the “Unicorn” status. The mixed-race identical twins, Alexander and Oliver Kent-Braham along with the software engineer, David Goatéfounded Marshmallow in 2017 with an aim to provide car insurance at competitive rates. The most important thing that helped Marshmallow insurance to achieve success was Kent-Braham’s approach. They focused on using smart algorithms and an extensive set of data to provide car insurance support to a wide variety of different customers.

Location of Marshmallow Headquarters

63/66 Hatton Garden Fifth Floor,
Suite 23 London, England,
EC1N 8LE, United Kingdom

The Journey of Marshmallow:

According to the Marshmallow founders, it was in 2015 that they realized the importance of building a car insurance company that can serve different types of customers. At that time, the three of them were working for the London start-up, Yoti. One day, they were talking to a friend of theirs who moved to the UK. Then they came to know how he as a migrant driver kept getting thrash by shockingly expensive quotes for car insurance. They recognized how the entire industry is wrecked. That one incident made them think about building Marshmallow to offer affordable car insurance.

Marshmallow is the second Black-owned company after Zepz in the UK to reach the status of “unicorn”. According to Extend Ventures, from 2009 to 2019, all-ethnic founding teams got just 1.6% of the venture capital funding, while Black entrepreneurs got only 0.2% of the funding. Kent-Braham blames the mindset of venture capital for this fact and says VCs need to have a broader vision. However, Kent-Braham’s motor insurance firm managed to raise $ 85 million in a funding round, valuing the firm at over $1.25 billion. The major investors of Marshmallow are Passion Capital, a primary investor in Monzo, French reinsurer Scor, and South African bank Investec. Yet the Kent-Braham brothers have the utmost control over the business.

Digital Insurance and Marshmallow

Marshmallow insurance firm provides insurance only digitally. The main focus of this company is to offer car insurance to emigrants who face expensive charges for insurance from the traditional insurer. To adapt policies for customers, this organization effectively uses machine learning. According to Kent-Braham, they use more data in comparison to their competitors to underwrite and offer insurance with more competitive rates. They also claim that because of their use of machine learning and data-driven analysis, they require to hire almost pretty much less support staff than their competitors require to hire.

Marshmallow insurance company, which is authorized and regulated by the Financial Conduct Authority in the UK, has currently more than 100,000 customers, and the company is also aiming to inflate throughout Europe.

What Type of Cover Does Marshmallow Offer?

Products and Services:

• Marshmallow is known for providing affordable car insurance to customers.
• This insurance company also launched a van product on 19^th May 2022 and currently offers van insurance. They are planning to offer other insurance in the future.

Marshmallow firm offers completely comprehensive insurance that is the UK’s highest level of protection for car incidents. This insurance covers damage instigated to your car, damage instigated to the property of other people, compensation for your injuries, as well as protection against theft, catching fire, and accidents.

Why Choose Marshmallow Insurance?

• This tech-based insurer has developed a user-friendly app where you can choose your suitable cover and customize your policy. By using technology, the Marshmallow team is able to manage their operations at a low cost and that allows them to provide insurance at a cheaper cost.
• As this firm considers the whole driving experience of the customers, emigrants can easily get car insurance at an affordable price. Customers can also get 24/7 support and regulate updates regarding policies on their apps.

How Does Marshmallow Calculate Premium?

Marshmallow considers various factors to determine the cost of your premium, such as your plan, your driving history, current claims, and information (engine size, car’s age) about your car, etc. To treat different people differently, this insurance firm individually calculates the insurance cost for every policyholder.

How to Make a Claim?

There are mainly two types of claims that you can make to Marshmallow, such as-

• General Claims:

In the case of theft, vandalism, incidents, accidents, and glass.

To make a general claim, you will require-
                                                      I) Your insurance policy number
                                                      II) Your car’s registration plate
                                                      III) Proof of the damage to your vehicle
                                                      IV) Third-Party Information  

• Breakdown Assistance:

In the case of a breakdown of your vehicle.

If you want to report a breakdown, you will require-
                                                      I) Your insurance policy number
                                                      II) Your car’s registration plate
                                                      III) Your car’s location

Collaboration with ClimatePrtner:

Marshmallow is the first motor insurer to collaborate with ClimatePartner. ClimatePartner promotes ethical carbon-neutral development and renewable energy in countries with emerging economies and third-world countries. Because of this collaboration, Marshmallow now offers its customers free carbon-neutral driving for 500 miles under their offsetting program.

Wrap Up

In 2021, to help customers with easier and fast insurance, Marshmallow Insurance company launched an automated app for Android and iOS users. Because of the low cost and flexibility of insurance products, this firm received great success within a year. Just after 18 months in the insurance business, they started to launch other insurance products in their services. The founders say, “We did not start Marshmallow because we loved insurance. Actually, quite the opposite.” This is why they always focus to bring something new that can help insurance customers. Hopefully, they will launch other insurance products at an affordable cost in the future.