{"id":121083,"date":"2021-09-08T13:41:09","date_gmt":"2021-09-08T13:41:09","guid":{"rendered":"https:\/\/fin2me.com\/?p=121083"},"modified":"2021-09-08T13:41:09","modified_gmt":"2021-09-08T13:41:09","slug":"black-owned-start-ups-in-the-uk-are-hitting-billion-dollar-valuations-for-the-first-time","status":"publish","type":"post","link":"https:\/\/fin2me.com\/politics\/black-owned-start-ups-in-the-uk-are-hitting-billion-dollar-valuations-for-the-first-time\/","title":{"rendered":"Black-owned start-ups in the UK are hitting billion-dollar valuations for the first time"},"content":{"rendered":"<ul>\n<li>London-based digital insurance start-up Marshmallow has raised $85 million in a funding round valuing the company at $1.25 billion.<\/li>\n<li>Founded by mixed-race identical twins Oliver and Alexander Kent-Braham, it&#x27;s the second Black-owned company in Britain to reach &quot;unicorn&quot; status.<\/li>\n<li>Just 0.2% of venture capital funding went to Black entrepreneurs in the U.K. between 2009 and 2019, according to Extend Ventures.<\/li>\n<\/ul>\n<p>LONDON \u2014 Billion-dollar start-ups are hardly a rarity anymore, with data firm CB Insights listing more than 800 privately-held tech firms worldwide with a valuation of $1 billion or more.<\/p>\n<p>But Marshmallow, a London-based digital insurance platform, is as rare as they come. Founded in 2017 by mixed-race identical twins Oliver and Alexander Kent-Braham, it&#x27;s the second Black-owned company in Britain to reach the coveted status of &quot;unicorn.&quot;<\/p>\n<p>The first was Zepz, which achieved a $5 billion valuation in an August financing round. The money transfer firm, formerly known as WorldRemit, was founded by Somali-born entrepreneur Ismail Ahmed.<\/p>\n<p>&quot;We were pretty surprised by this fact,&quot; Oliver Kent-Braham, Marshmallow&#x27;s CEO, told CNBC in an interview.<\/p>\n<p>It reflects an ongoing lack of diversity in the tech industry. In the U.K., just 1.6% of venture capital funding went to all-ethnic founding teams between 2009 and 2019, according to Extend Ventures, while only 0.2% of funding went to Black entrepreneurs.<\/p>\n<p>Kent-Braham thinks the venture capital mindset is to blame. Many tech investors ignore cold emails and only back founders they know through colleagues, he said.<\/p>\n<p>&quot;VCs really need to look a bit broader,&quot; the 29-year-old entrepreneur told CNBC.<\/p>\n<p>&quot;The number of times a VC said: &#x27;I wouldn&#x27;t respond to cold emails because you should be able to hustle and intro to me.&#x27; It&#x27;s much easier to hustle and intro to you if you went to your university and you know a ton of people that know you.&quot;<\/p>\n<p>Kent-Braham&#x27;s firm, Marshmallow, raised $85 million in a funding round valuing the company at $1.25 billion. The cash came solely from existing investors, including Passion Capital, an early investor in digital bank Monzo, as well as South African bank Investec and French reinsurer Scor.<\/p>\n<p>The Kent-Braham brothers still control most of the business following the latest investment round. The pair co-founded Marshmallow with software engineer David Goat\u00e9, who they previously worked with at London start-up Yoti.<\/p>\n<h2>Insurance goes digital<\/h2>\n<p>Marshmallow is a digital-only insurance provider. The company got its start offering car insurance mainly to expats whom, it says, often face higher charges from traditional insurers.<\/p>\n<p>The firm, which is authorized by the U.K.&#x27;s Financial Conduct Authority, touts its use of machine learning to tailor policies for customers as a key advantage over incumbents in the industry like Admiral and Axa.<\/p>\n<p>&quot;We try to use more data than our competitors to underwrite people and then to digitize everything,&quot; Kent-Braham said. &quot;We need to hire about half what our competitors need to hire to support customers. We believe we&#x27;re really well-placed to take market share.&quot;<\/p>\n<p>With more than 100,000 customers now signed up, Marshmallow plans to launch other products and expand throughout Europe.<\/p>\n<p>The insurance technology, or insurtech, market has seen a surge of investment this year after the Covid-19 pandemic accelerated a shift in consumer behavior toward online services.<\/p>\n<p>Zego, a U.K. commercial motor insurer focused on the gig economy, raised $150 million at a $1.1 billion valuation in March. Wefox, a German insurance start-up, bagged $650 million in a June investment round valuing the company at $3 billion.<\/p>\n<p>Marshmallow&#x27;s fundraising also highlights the flood of capital flowing into Europe&#x27;s tech industry lately. European tech firms have already raised more money this year than they did throughout the whole of 2020.<\/p>\n<p><em>Correction: The headline and text of this story has been changed due to an incorrect characterization of Marshmallow as Britain&#x27;s first Black-owned unicorn.<\/em><\/p>\n<p>Source: <a href=\"https:\/\/www.cnbc.com\/2021\/09\/07\/insurance-start-up-marshmallow-becomes-second-uk-black-owned-unicorn.html\" target=\"_blank\" rel=\"noopener\">Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>London-based digital insurance start-up Marshmallow has raised $85 million in a funding round valuing the company at $1.25 billion. Founded by mixed-race identical twins Oliver [&#8230;]<\/p>\n","protected":false},"author":3,"featured_media":121082,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Black-owned start-ups in the UK are hitting billion-dollar valuations for the first time - Fin2me<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fin2me.com\/politics\/black-owned-start-ups-in-the-uk-are-hitting-billion-dollar-valuations-for-the-first-time\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Black-owned start-ups in the UK are hitting billion-dollar valuations for the first time - Fin2me\" \/>\n<meta property=\"og:description\" content=\"London-based digital insurance start-up Marshmallow has raised $85 million in a funding round valuing the company at $1.25 billion. 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