Zego will use the cash to double its workforce from 75 to 150 to take advantage of the growing market, as more workers enter the gig economy.
Bosses claim the funding round is one of the biggest amounts ever raised in the so-called “insurtech” industry and is also set to help the business expand across Europe beyond offerings in the UK, Ireland and Spain.
Investors in the Series B round include early funders in German food delivery platform Delivery Hero, Traget Global, and fintech giant Transferwise.
Sten Saar, co-founder and chief executive of Zego, said: “When we built Zego from scratch three years ago, our mission was to transform the insurance sector by creating products which truly reflected the rapidly changing world of transport.
“The world is becoming more urbanised and, because of this, we are moving from traditional ownership of vehicles to shared usership.
“This means that the rigid model of insurance that has existed for hundreds of years is no longer fit for purpose. We are extremely proud to be at the forefront of change.”
Ben Kaminski, partner of lead investor Target Global, said: “Zego identified a major gap in the insurance market and created a unique business model to fill it, which the incumbents will find very difficult to replicate.”
TransferWise founder Taavet Hinrikus said: “I’ve been following Zego for some time and have been hugely impressed by the team and their ability to rapidly roll out innovative new insurance products and quickly gain market share.
“This investment will be a springboard for further growth that will see them continue to shake up the insurance sector.”
The firm currently insures a third of the UK’s food delivery market, largely through partnerships with Deliveroo, Just Eat and Uber Eats.