Marshmallow operates a vertically integrated insurance model, with a UK-regulated broker and its own Gibraltar-licensed insurance carrier.
Its economics come from insurance premiums and fees, while its full-stack structure also lets it earn investment income on premium funds held before claims are paid, which is at the heart of how Marshmallow makes money.
Founded in 2017 by twin brothers Oliver and Alexander Kent-Braham alongside CTO David Goate, all three previously at digital identity company Yoti Marshmallow built its business on a gap the rest of the UK insurance market had stopped noticing: newcomers to the country were being priced as if they'd never driven a car in their lives.
The Problem Marshmallow Was Built to Fix
Marshmallow said in 2018 that foreign-born drivers in the UK were being quoted car insurance prices roughly 51% higher than the market average, about £300 a year, it estimated.
The reason was structural: UK insurers often had no way to read overseas driving history, so a decade of clean motoring abroad looked identical to a brand-new licence. Oliver Kent-Braham put it bluntly at the time: insurers "don't attempt to understand foreign drivers living in the UK, instead they just overcharge them."
That framing fairness as a product feature, not a marketing line, has stayed central to how Marshmallow talks about itself.
Who Marshmallow Actually Serves
Marshmallow primarily serves people who've recently moved to the UK, with 70% of customers who joined the company in 2023 new to the UK, according to Marshmallow itself.
That's the core of the business model, and it's precisely why car insurance for immigrants has become such a defined category on the UK market. The company has grown from around 100,000 insured drivers in 2021 to more than one million by 2025.
The product range has expanded alongside the customer base. Marshmallow's car insurance started with a single comprehensive product and later grew to include lower-cost tiers such as Essential, plus additional cover options, a build-out that continued with van insurance in 2024.
Where most insurers saw a hard-to-price risk in this car insurance for immigrants segment, Marshmallow saw a large, underserved market worth building a whole company around.
How the Pricing Model Works
Marshmallow prices risk by combining a driver's overseas driving and claims history with other data sources, including telematics in relevant products or circumstances, rather than relying solely on UK records the way many incumbent insurers do.
It's the same logic long used for young drivers via "black box" policies, pointed at a different underserved group: newcomers, not the newly qualified.
The effect, per Sacra's 2025 analysis, is an average saving of around £220 for customers versus incumbent insurers. Instead of treating a lack of UK history as a red flag, Marshmallow treats it as a data gap it can fill from elsewhere.
The Money Mechanics
How does Marshmallow make money? Primarily through the insurance premiums and fees it earns as a vertically integrated insurer, running both a UK broker and its own Gibraltar-licensed insurance carrier rather than distributing for someone else's balance sheet.
On top of that core premium and fee income, Sacra's 2025 analysis estimates that investment income accounts for roughly 60% of revenue, with brokerage fees accounting for the remaining 40%. These are analyst estimates rather than figures Marshmallow itself has published.
This model is only possible because Marshmallow built the regulatory infrastructure to match. Marshmallow Financial Services Limited is the UK broker, authorised and regulated by the FCA under firm reference number 797672.
A separate entity, Marshmallow Credit Services Limited, handles the car finance product. Underwriting sits with Marshmallow Insurance Limited, a Gibraltar-licensed insurance carrier authorised by the Gibraltar Financial Services Commission in December 2020, making Marshmallow only the second UK insurtech, after Zego, to run its own Gibraltar insurer.
Worth noting: Sacra's analysis also says Marshmallow relies on a single quota-share reinsurer alongside excess-of-loss arrangements, so a share of underwriting risk still sits outside the company.
Marshmallow Insurance Revenue and Profitability
Marshmallow's turnover reached £184 million in 2023, up 74.4% on the year before, according to a Companies House filing reported by Insurance Post, which recorded a £208,000 loss for the holding company, Marshmallow Technology Limited, on that turnover.
That follows an earlier run: £22.9 million in revenue for 2022, up 175% year-on-year, with a net profit of £709,000, per figures released by Marshmallow and reported by Coverager.
The Marshmallow insurance revenue trajectory since has been steep by any UK insurtech's standard, from under £23 million to £184 million in a single year. For 2024, Sacra estimates revenue reached roughly $370 million, alongside a net profit of around $20.3 million, a margin of about 7%.
Those 2024 figures are Sacra's own modelling rather than a confirmed Companies House filing, so treat them as a strong estimate rather than an audited number until Marshmallow's next accounts land.
Marshmallow Series A Funding, and the Rounds That Followed
Marshmallow Series A funding closed in November 2020, raising $30 million at a $310 million valuation, and marked the point where the company moved from proving the idea to scaling it.
That round followed a $1.2 million seed raise in 2018, backed by Passion Capital and Investec Bank, and came before an $85 million Series B in September 2021 that pushed Marshmallow's valuation past $1.25 billion, a raise Reuters described as making the company a Black-founded UK unicorn.
The company's most recent raise, a $90 million Series C in April 2025 led by Portage Capital with participation from BlackRock and Columbia Lake Partners, valued Marshmallow above $2 billion.
The round was roughly split between equity and debt, with part of the equity consisting of convertible debt raised in 2023. Altogether, Marshmallow has raised approximately $220 million to date across its seed, Series A funding, Series B, additional debt financing, and Series C rounds — a conventional insurtech funding arc, except for how fast the revenue has followed it.
What's Next
Marshmallow's own positioning frames car insurance as the entry point into something bigger: becoming a broader financial services provider for people who've just moved somewhere new.
Beyond the car finance product it already runs through Marshmallow Credit Services, the company has expanded into other financial services, including home insurance.
For a company that started by fixing one mispriced product, the direction of travel looks less like an insurer diversifying and more like a financial services company that happened to start with insurance.
FAQs
1. How does Marshmallow make money?
Marshmallow makes money primarily through insurance premiums and fees as a vertically integrated insurer, with an additional estimated share of revenue from investment income on premium funds held before claims are paid. Sacra's 2025 analysis puts that split at roughly 60% investment income to 40% brokerage fees, though these are analyst estimates rather than Marshmallow's own published figures.
2. How does Marshmallow price car insurance for immigrants?
Marshmallow prices car insurance for immigrants by combining overseas driving and claims history with other data sources, including telematics where relevant, rather than relying only on UK-specific records. Sacra estimates that Marshmallow customers save around £220 on average versus incumbent insurers.
3. How much funding has Marshmallow raised?
Marshmallow has raised approximately $220 million to date, including a $1.2 million seed round in 2018, $30 million in Series A funding in 2020, an $85 million Series B in 2021, additional financing, and a $90 million Series C in April 2025. The Series C valued the company above $2 billion, led by Portage Capital with BlackRock and Columbia Lake Partners.
Also read: How Thought Machine Makes Money: The Core Banking Platform Powering Global Banks
Sources: TechCrunch, Coverager, Insurance Post (citing UK Companies House filings), Reuters, FinTech Global, Sacra's 2025 research and company data, the Gibraltar Government's official press release, and Marshmallow's own regulatory disclosures via the FCA and Companies House.
The EP+ Editorial Desk covers UK startups, founder stories, and venture capital. All editorial content is independently produced and human-reviewed before publication.
