Zego, a London-based insurtech firm, restructures to focus on profitability by 2025.
- The company exits the B2B market to concentrate on sustainable growth in the B2C sector.
- Over 100 job cuts have been made, primarily affecting the B2B division.
- Strategic adjustments resulted in reduced annual losses and a slight increase in turnover.
- Zego aims to achieve monthly profitability by the start of 2025.
In a significant strategic overhaul, Zego, the London-based insurtech firm known for providing insurance to food delivery riders for companies such as Deliveroo, Uber Eats, and Just Eat, announced a realignment of its business model. This realignment focuses on achieving profitability by 2025 through a strategic pivot away from the business-to-business (B2B) sector towards a stronger emphasis on the business-to-consumer (B2C) market. This shift, the company asserts, enables a more rapid path to profitability, capitalising on the potentially lucrative opportunities within the B2C segment.
To support this transition, Zego has made the difficult decision to reduce its workforce, cutting over 100 jobs, primarily from its B2B operations during the third quarter of 2023. This move is part of an effort to better position the company for long-term success and efficient growth, as stated in its recent communications. With these significant changes, the insurtech firm aims to drive sustainable growth as it navigates the competitive landscape of the insurance industry.
Recent financial accounts reveal the impact of these strategic decisions. Zego’s turnover experienced a modest 1.1% rise, reaching £19.5 million in 2023, while pre-tax losses were significantly curtailed, dropping by 44% to £36.2 million. The reduction in staff costs has been credited as a major factor in these improved financial outcomes, suggesting that the restructuring is beginning to yield positive results.
Founded in 2016 by entrepreneurs Harry Franks and Sten Saar, Zego became the UK’s first insuretech unicorn following its 2021 Series C funding round, which raised $150 million at a valuation of $1.1 billion. Notable investors in this round included Transferwise founder Taavet Hinrikus, as well as firms like Target Global, DST Global, Balderton Capital, and Latitude. The company’s innovative approach combines advanced technology and diverse data sources to offer competitive insurance products, supporting self-employed drivers and entire fleet operations efficiently.
Zego’s commitment to restructuring and focusing on the B2C market positions it towards achieving its goal of profitability by 2025.
