London startup Zego, which offers insurance products for the sharing economy, has reportedly raised £6 million in Series A funding. The round was led by Balderton Capital, with participation from existing investors (including LocalGlobe) and unnamed angel investors from the insurance industry. As Zego has launched new insurance products and taken its business overseas, this round of funding will mainly be used to expand the team.

        Founded in 2016, Zego's core members include Harry Franks, Sten Saar and Stuart Kelly. Its first product targets delivery drivers using platforms like Deliveroo, offering motorcycle insurance and car insurance.

        In the sharing economy era, many food delivery workers are not full-time; they work fixed part-time hours or even deliver in scattered spare time. Therefore, unlike traditional expensive insurance, Zego charges by the hour, saving delivery riders on insurance costs. Drivers only buy insurance when logged into the various delivery order platforms.

        Zego has also built good relationships with the platforms it supports, which means its insurance app can connect to those delivery ordering platforms; drivers who have bought Zego insurance do not need to manually tell Zego whether they have accepted an order from a platform and are working. Instead, once drivers enter order mode, Zego automatically starts recording.

        And because Zego knows when and where drivers are on the road, it can use these data in the future to adjust risk assessments accordingly. As regulatory scrutiny intensifies, platforms like Deliveroo have to defend their use of individual delivery drivers. For delivery drivers, commercial insurance is mandatory, but the platform companies are not these drivers' employers and therefore cannot provide insurance directly. However, they can require drivers to show proof of commercial insurance before registering on their platforms, to ensure these delivery drivers are protected while working.

Source: 36Kr 2017-11-20