September 18, 2021

Twelve Month Payday Loans

The Passionate Pursuit Of Business

Insurance start-up Marshmallow becomes second UK Black-owned unicorn

3 min read

Marshmallow co-founders Alexander and Oliver Kent-Braham.

Marshmallow

LONDON — Billion-dollar start-ups are hardly a rarity anymore, with data firm CB Insights listing more than 800 privately-held tech firms worldwide with a valuation of $1 billion or more.

But Marshmallow, a London-based digital insurance platform, is as rare as they come. Founded in 2017 by mixed-race identical twins Oliver and Alexander Kent-Braham, it’s the second Black-owned company in Britain to reach the coveted status of “unicorn.”

The first was Zepz, which achieved a $5 billion valuation in an August financing round. The money transfer firm, formerly known as WorldRemit, was founded by Somali-born entrepreneur Ismail Ahmed.

“We were pretty surprised by this fact,” Oliver Kent-Braham, Marshmallow’s CEO, told CNBC in an interview.

It reflects an ongoing lack of diversity in the tech industry. In the U.K., just 1.6% of venture capital funding went to all-ethnic founding teams between 2009 and 2019, according to Extend Ventures, while only 0.2% of funding went to Black entrepreneurs.

Kent-Braham thinks the venture capital mindset is to blame. Many tech investors ignore cold emails and only back founders they know through colleagues, he said.

“VCs really need to look a bit broader,” the 29-year-old entrepreneur told CNBC.

“The number of times a VC said: ‘I wouldn’t respond to cold emails because you should be able to hustle and intro to me.’ It’s much easier to hustle and intro to you if you went to your university and you know a ton of people that know you.”

Kent-Braham’s firm, Marshmallow, raised $85 million in a funding round valuing the company at $1.25 billion. The cash came solely from existing investors, including Passion Capital, an early investor in digital bank Monzo, as well as South African bank Investec and French reinsurer Scor.

The Kent-Braham brothers still control most of the business following the latest investment round. The pair co-founded Marshmallow with software engineer David Goaté, who they previously worked with at London start-up Yoti.

Insurance goes digital

Correction: The headline and text of this story has been changed due to an incorrect characterization of Marshmallow as Britain’s first Black-owned unicorn.

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