Marshmallow, the British insurance startup for migrants, raises $90 million at a valuation of over $2 billion.

The British startup Marshmallow has experienced remarkable growth in its trajectory by applying innovations in data science to create auto insurance policies targeted at immigrants and other consumers who have traditionally been overlooked or whose costs are prohibitive in the conventional market. Currently, Marshmallow insures one million drivers and has projected annual revenues of $500 million. Recently, the company successfully raised an additional $90 million to expand its operations.

With the new funding, Marshmallow plans to venture into financial services and develop an additional range of insurance products that they hope will attract a growing audience, despite the negative effects of Brexit. CEO Oliver Kent-Braham emphasized in an interview that they view migration as a valuable business opportunity. He noted that there is a growing discrepancy in the UK between the number of people leaving the labor market and those entering, with 1.2 million migrants registered in 2024 headed to the country. “We need migration to bring more people into employment, and we want to facilitate the integration of those arriving in the UK,” he added.

Marshmallow believes that part of this integration involves being able to drive insured vehicles, and in the near future, the startup hopes to offer home insurance and loans. They are planning to launch their first loan product this year, aiming to create a financial and insurtech "one-stop-shop" that helps newcomers adapt to life in the country. This funding round has been approximately evenly split between equity and debt, with a valuation exceeding $2 billion, in contrast to the $1.25 billion they reached in their last funding round in 2021.

Regarding business growth, the company has increased its number of insured from 100,000 in 2021 to one million, boosted by an eye-catching outdoor advertising campaign in cities like London. The funding has been led by Portage Capital, with participation from BlackRock and Columbia Lake Partners, and to date, Marshmallow has managed to raise around $220 million.

This new funding has been managed in a challenging context for insurance startups in Europe. On one hand, there is the difficult story of WeFox, which saw its valuation rise to $4.5 billion in 2023 but is facing serious financial issues after years of losses. Despite this, there are more positive signs in the insurtech sector that are building more sustainable business models. Recently, Ominimo, another Polish startup, attracted significant investment after reaching profitability.

What sets Marshmallow apart from other competitors, including large retailers, is its focus on inclusivity and diversity. Founded by twins Oliver and Alexander Kent-Braham along with David Goaté, the startup is notably one of the few "unicorns" in the UK with founders of Afro-descendant origin. Kent-Braham mentioned how diversity in leadership contributes to their strength and ability to find innovative solutions. “This is a very strong founding team,” highlighted Devon Kirk, co-leader of Portage Capital Solutions, referring to the importance of different perspectives in the financial services sector.