Marshmallow has raised a $90m funding round as the car insurance fintech revs up international expansion plans and accelerates plans to become a “one-stop financial shop for migrants.”
Founded in 2017 by twin brothers Oliver and Alexander Kent-Braham and David Goaté, Marshmallow is a car insurance fintech focusing on immigrants to the UK. This demographic often faces difficulties obtaining insurance at rates comparable to those born in the country.
“People who move country experience real hardship in finding good financial products,” says Oliver Kent-Braham in an interview with Sifted.
The UK-based fintech previously raised a $83m Series B in 2021 from backers such as Passion Capital, Investec and Scor that valued it at $1.25bn. Marshmallow’s new funding round is a mixture of debt and equity from investors such as Portage Ventures, BlackRock and Columbia Lake Partners that will up its valuation to $2bn.
Accelerating international plans and new product lines
But don’t expect the car insurtech to completely shift gears as it zooms into its next phase. Oliver Kent-Braham says Marshmallow will release its first lending product later this year, which will also be geared towards immigrants based in the UK.
“We hang our hat on the fact that people will continue to migrate and that traditional financial institutions won’t build the right products for these customers,” he says.
According to provisional estimates from the Office for National Statistics (ONS) for the year ending June 2024, 1.2m long-term immigrants arrived in the UK.
Marshmallow tells Sifted the company is eyeing international expansion. Countries that have historical and forecasted high levels of migrations, such as Germany, Canada and the US, are top contenders for the fintech’s next market.
Fueling up for M&A
Marshmallow’s injection of new capital comes as the fintech flirts with breaking even. According to annual results dated the year end of 2023, Marshmallow secured £184m in annual turnover against a £0.1m pre-tax loss.
The Marshmallow co-CEO says while it’s keeping its eyes open for potential M&A opportunities, it’s not an immediate priority. Still, the company would consider buying other fintechs focused on serving its core customer group.
“In the short term, we’re focusing on organic growth, but we’ll definitely have our eyes open for any interesting opportunities,” he says.
As for the future of Marshmallow, Kent-Braham didn’t rule out an IPO as an option to secure liquidity for investors but is keeping his options open.
“Our ambition is to become a one-stop financial shop for migrants,” he says. “And we believe we can do that as a private and public company.”
Read the orginal article: https://sifted.eu/articles/marshmallow-fundraise/
