Laka, an insurtech start-up, has raised $8 million in new funding and acquired one of its smaller competitors in a push to expand deeper in Europe.
London-based Laka provides insurance cover to e-bike owners in several European markets, both directly and through retailers like Decathlon.
The round of €7.6 million ($8 million) is led by French mobility fund Shift4Good. Other investors in the funding include Autotech Ventures, Porsche Ventures, Creandum, Ponooc, and Elkstone Partners.
The round is a mix of debt and equity.
As well as the funding, the company has acquired Cylantro, a France-based e-bike insurance broker.
Laka has built a bespoke insurance product that it says is a “collective-driven insurance model” where cover is based on the cost of claims. Cyclists pay no upfront premium and rather each month’s claims are shared amongst a collective of cyclists.
According to the company, under this model, cyclists only pay for what they need.
Chief executive Tobias Tauptiz said that Laka is expanding on the B2B2C (business-business-consumer) model of selling insurance by partnering with retailers to reach more cyclists.
“Over time we learned that there’s additional appetite on the B2B2C side, working with big partners like Decathlon, one of the world’s leading sports retailers, and we have been live with them for about two years now in various countries,” he said.
Tauptiz said that there’s a big opportunity in micromobility insurance to become the dominant player in Europe for insuring this still relatively new bread of transport.
“I think there’s a big wide space in the European market for what we call a green mobility powerhouse. You have lots of individual local brokers that service one individual country, but nobody has solved the pain point for these bigger partners who sell bikes across territories, across borders with lots of challenges and regulatory perspectives and the like,” he said.
“I think we’ve built a great infrastructure backbone to service a Decathlon for example in France, Belgium and the Netherlands, and do so now increasingly with more and more partners.”
This is one of the driving forces behind the acquisition of French start-up Cylantro, a another insurtech player offering a similar model to cyclists.
The deal will give Laka a stronger foothold in the French market, Tauptiz said, with Cylantro chief executive Thomas Arnou joining Laka to lead the French business.
“You can of course go about [expansion] organically or you can find the right partners inorganically with the same mission. Our mission is to service a lot of customers across the European continent and at the point of claim where our model is strongest and we can we provide the full benefit to our consumers,” Tauptiz said.
“By that I mean an increasing amount of our income is no longer insurance driven but auxiliary services. For example, when your bike gets stolen, I’ll send your new bike to your doorstep, I’ll source that for you. The same goes for salvaging damaged bikes and bike parts and giving the money back to the customer and other elements like that.”
Currently Laka operates in the UK, Netherlands, Belgium, France and Germany with eyes on Denmark and Austria ahead of a wider European push.
Tauptiz said that Laka will consider potential acquisitions in these markets to bolster its growth.
Several other firms and investors took part in Laka’s funding round including ABN AMRO Ventures, LocalGlobe, 1818 Ventures, Seedrs and Zwift co-founder Eric Min.
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