Rob Moffat
Nov 20, 2017 · 3 min read

As regular readers will know I have been looking at the insurance industry in some depth and for some time. I believe there is the opportunity for many new $B tech companies to be created here, given the multi-trillion dollar market size and all the benefits that technology and data can bring to distribution, underwriting and claims. See prior posts here and here. That being said, this is also a tough sector to crack, and one where many of the companies are still in early stages of development. As a result my strong interest in insurance has taken time to translate into investments. I am delighted to now be “in the game” with Zego (and one more investment yet to be announced).

In the end this was an easy decision, as Zego offered all the attributes I had been looking for in an insurtech investment:

1. Exceptional team who really understand their target market and are moving fast

The founders Harry and Sten worked together at Deliveroo, one of the global leaders in the ‘gig economy’ with their use of self-employed drivers. They saw first hand the challenge that drivers experienced in finding cost-effective and flexible insurance with adequate coverage. They are both highly intelligent first-class operators with experience in two successful London startups (Deliveroo and Onefinestsay). Stu Kelly their co-founder and CTO met them at Onefinestay and has also worked at Hubble and Mainframe. The team have moved exceptionally fast since they founded Zego just 18 months ago, growing to 33 talented staff.

2. New market, growing very fast, which traditional insurers find it hard to cover

The explosive growth of companies such as Deliveroo and Uber has led to a massive growth in demand for flexible insurance for drivers and other self-employed workers. Drivers must have professional insurance but their only options are expensive annual policies which can come in at thousands of pounds, paid upfront or at an eye-watering financing rate. Completely impractical for a Deliveroo driver who works two evenings a week. Few traditional insurers have covered this ‘niche’ sector and their cost base (where they pay their software house for every change to a policy) does not allow insurance to be sold by the hour.

3. Technology which fundamentally changes their insurance product

Zego have built a mobile-first product which their users love (9.5/10 on Truspilot), which is a rare thing in insurance. They have built their own technology allowing drivers to switch insurance on and off instantly, and pay only for what they use. They also integrate with the delivery platforms, and are building in telematics, allowing a new approach to underwriting resulting in sensible loss ratios.

4. Cost-effective route to market

The platforms providing delivery services on demand want to provide a great experience for their drivers, and are also facing regulatory pressures in their markets. They are therefore enthusiastic adopters of third party solutions such as Zego that ensure all their drivers have the right insurance at a good price.

5. Capital-efficient model

Zego, in common with many London insurance startups, have started out as a broker, avoiding the need for high amounts of regulatory capital upfront. They are deeply involved in product design and pricing with their insurance partners, who include some of the largest global players in insurance and reinsurance.

It is also great to work here with a strong set of co-investors. LocalGlobe led the seed round and are following on in this round, together with experienced executives from the insurance sector.

These are still the early days of the Zego journey but the speed of travel is high and accelerating…


Investing Early in Europe’s Leading Entrepreneurs

Rob Moffat

Written by

Partner at Balderton Capital in London. Companies I work with here include Carwow, Wooga, Cleo, Mojiworks, Zego, Dinghy, PKB, Prodigy. Formerly Google & Bain.



Investing Early in Europe’s Leading Entrepreneurs

Welcome to a place where words matter. On Medium, smart voices and original ideas take center stage - with no ads in sight. Watch
Follow all the topics you care about, and we’ll deliver the best stories for you to your homepage and inbox. Explore
Get unlimited access to the best stories on Medium — and support writers while you’re at it. Just $5/month. Upgrade