U.K. startup Marshmallow has secured $90 million in funding to expand its innovative car insurance model, which leverages data science to serve immigrants and underserved consumers. The company, now insuring a million drivers and boasting a profitable $500 million annual revenue run rate, plans to extend its services into financial products and additional insurance offerings. This expansion aims to cater to the U.K.'s growing migrant population, which CEO Oliver Kent-Braham sees as a significant opportunity. He highlighted that the U.K. needs migration to fill workforce gaps, with 1.2 million migrants recorded in 2024 alone.

Marshmallow's vision includes enabling migrants to drive insured vehicles, access home insurance, and obtain loans, creating a comprehensive financial and insurance ecosystem for newcomers. The latest funding round, a mix of equity and debt, values the company at over $2 billion, a substantial increase from its $1.25 billion valuation in 2021. The number of insured individuals has grown tenfold since 2021. Portage Capital led the funding round, with participation from BlackRock and Columbia Lake Partners.

This investment arrives at a complex time for European insurance startups. While some, like WeFox, have faced difficulties despite high valuations, others, such as Poland's Ominimo, are demonstrating sustainable business models. Ominimo, similar to Marshmallow, utilizes AI to refine risk prediction in car insurance. Marshmallow distinguishes itself through its commitment to inclusivity and diversity, reflected in its leadership. Co-founded by twins Oliver and Alexander Kent-Braham, along with David Goaté, Marshmallow is a rare U.K. unicorn with Black founders. Devon Kirk of Portage Capital emphasized the strength of Marshmallow's diverse leadership, noting the benefits of different perspectives in financial services.