Marshmallow: The unicorn that’s anything but fluff
IT’S NICE to have everybody together again, at least some of the time,” says Oliver Kent-Braham, one of the understated pair at the top of one of Britain’s newest unicorns, as he guides me through their clean, airy and now once-again buzzing Old Street office.
Like most companies, the pandemic forced Oliver and his brother Alexander to change the way they managed their business. Unlike most companies, they went on an expansionary tear that – in mid-September – saw their disruptive insurance business valued over $1bn.
Marshmallow is, on the face of it, not the most complex business in the world; it’s a car insurance business, began as a firm specifically targeted at migrants but now open to all. What makes it different, Oliver explains, is how the company uses data. “Under the hood, which no-one can see, is how we use data to price people effectively,” he says over a coffee.
It’s allowed them not just to compete with the big boys but offer cheaper insurance to certain portions of the market. Agility is the key.
“What would you rather do? Have a house that you need to remodel or a house that you’ve built from scratch?,” he laughs.
“These old companies have massive legacy databases that are really hard to migrate to, and really hard to get data from. So even if there’s the desire from (a big insurer),” he asks rhetorically, how can you employ data with as much flexibility and agility as Marshmallow does?
The answer is – they can’t. Legacy IT systems have left insurers unable to catch up with data analytics, and into the gap come Marshmallow. Oliver reckons they’re not just cheaper, but offer better customer service.
Investors clearly agree, hence the huge valuation.
What does Oliver think investors say after he and his brother have left the room?
“Can this company go and take large market share? And I think that we’ve shown so far is that yes, we can.”
The firm is certainly thinking big. Founded just a few years ago and run from the cafe in a Virgin Active – “we got a gym membership and a desk for £80 a month,” Oliver recounts – it’s clear Marshmallow are thinking big. The market for insurance is worth quite literally trillions across Europe.
The idea for Marshmallow came from a meeting with a South African complaining about the price of his premiums, but it’s the fintech ecosystem which Oliver gives credit for turning their idea into something scalable.
“I think I’m Monzo card holder number seven or something.” he says with a laugh. But that ecosystem, Oliver thinks, could be a little more diverse. Marshmallow are one of only two black-founded unicorns in Britain, out of a number believed now to be well over a hundred.
He says there’s a problem with the way venture capital is dished out – not necessarily because of race, but simply because of social capital.
“People just naturally invest in people like them,” he says.
“I read a blog on this from a VC. He says he doesn’t respond to emails because he wants people to hustle to get an interview.
“At the time I thought yeah, anyone can do that. But it’s easier to hustle to get an intro to the dude that went to Stanford if you also want to Stanford. You probably have a shared professor, or your friend is friends with his brother.”
For Oliver, though, it’s an opportunity for London.
“We’ve proven that companies perform better with a diverse thought base. You can extrapolate that across the city to a more diverse leadership base.”
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