Luko raises €50 million: how the insurtech betting on ethics works

Luko is leveraging technology to revolutionize the home insurance industry, and more. In the wake of Lemonade, it has devised a giveback model that allocates a portion of premiums to charitable purposes

Published on 14 Jan 2021

Bringing the world of insurance closer to that of social commitment: this is the winning idea put into practice by the Parisian startup Luko, which aims to digitalize the world of home insurance. 

A few days ago Luko has raised €50 million in a B Series investment round closed in just two weeks and led by EQT Ventures, which was also attended by Assaf Wand, CEO and co-founder of the unicorn Hippo Insurance, and the CEO of Zalando Robert Gentz. 

An extremely positive result considering that in the Series A round, closed in November 2019, the startup had raised €20 million. 

Innovation in the home insurance market 

Founded in Paris in 2018, Luko is leveraging technology to revolutionize the insurance industry designed for owners or renters of residential properties. Specifically, the insurtech has activated partnerships with giants such as Munich Re and Swiss Re to subscribe to policies. 

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Luko’s policies can be accessed online in just a few minutes and are tailored to the needs of individual users through a variety of customizable features: by accessing the digital platform a beneficiary can be added, services can be modified or forms and certifications can be downloaded at any time. 

Thanks to the artificial intelligence and technology developed, the company can furthermore reduce the time it normally takes to pay compensation and respond to user requests, making the process up to twice as fast. 

What’s more, Luko also offers a fix-it service whereby, following a problem in their home, users can immediately contact a professional to help repair the damage done. 

The startup – currently boasting more than 100,000 users – is also working on a series of sensors and other physical devices aimed at protecting customers’ homes from the risk of flooding, fire or theft, and plans to begin distribution from next year. 

The Giveback Program 

Luko’s core concept, however, is its Giveback program. Luko draws down 30% of the overall premiums collected each year to fund company operating costs; the remaining 70% serves to settle customer claims. Should there be any unused funds at the end of the year, they will be donated to charities chosen directly by the users. 

Throughout 2020, for example, Luko donated €4,000 to Terre & Humanisme and Emmaüs Défi, associations committed to supporting environmentally sustainable agriculture and helping the less fortunate through the recycling of second-hand items, respectively. The company has also decided to donate an additional €4,000 to the operation “All together against the virus”, to help hospitals and research centers in fighting the Covid-19 pandemic. 

The Giveback program is the chance to prove that a transparent model can work even in our industry, which is often criticized for the opacity of the benefits it generates,” said Raphaël Vullierme, CEO. “Since our founding, we aim to prove that a different way of doing insurance is possible, with a positive social impact. We encourage our colleagues to do the same.” 

Luko’s plans for the future 

In the near future, Luko aims to export its services outside France. A first phase of Europe-wide expansion was already planned for 2020, but the coronavirus pandemic forced the insurtech to postpone everything until next year. 

The €50 million just raised will now give a further boost to the company’s projects, as explained on its blog, “We are looking to offer new products and services, develop our home care offering, and move to other European countries.” 

Other key elements for the next steps of the startup will be the launch of sensors for the home and the expansion of the team, currently consisting of 85 people. 

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