These twin brothers just made history in Britain as their insurance startup hits $1 billion

Marshmallow has become the second Black-owned company in Britain to reach the coveted status of “Unicorn.” This was after the company recently raised $85 million in a funding round, taking the company’s value to $1.25 billion. The funding round came from Passion Capital, which invested in banking firm Monzo, as well as South African bank Investec (INVP.L), and French reinsurer Scor (SCR.PA).

Firms with a valuation of $1 billion and above are given a “unicorn” status. The first Black-owned company to reach that status in Britain is Zepz, a money-transfer firm which achieved a $5 billion valuation in an August financing round.

London-based digital insurance platform Marshmallow was founded in 2017 by mixed-race identical twins Oliver and Alexander Kent-Braham. It has a staff strength of 170 employees and is expected to hire 400 people over the next two years, according to Yahoo Finance.

“Customers are voting with their feet — and they clearly want a modern insurance offering,” said Oliver Kent-Braham, co-founder and chief executive of Marshmallow.

“We’ve only just scratched the surface of disrupting a market worth $5trn globally, and there’s so much more we’re planning to do in the coming years. We look forward to building more products that help people in their time of need.”

Marshmallow is a digital car insurance platform that provides insurance mainly to expats. The company says expats usually face higher charges from traditional insurers. According to the company, it has more than 100,000 customers on its database and uses Artificial Intelligence to serve its customers. Also, Marshmallow is one of just two insurtech companies in the UK to have secured an insurance license.

CNBC also reports that insurtech firms saw a surge in market investment this year after the Covid-19 pandemic accelerated a shift in consumer behavior toward online services. Aside from Marshmallow and Zepz, CNBC reports that a U.K. commercial motor insurer focused on the gig economy, Zego, raised $150 million at a $1.1 billion valuation in March. Also, German insurance start-up Wefox raised $650 million in a June funding round valuing the company at $3 billion.

According to the Harvard Business Review, Black founders receive less than 1% of venture capital, therefore the Black Founders Fund was created to address challenges with VC funding for Black-owned businesses.