Investors are wagering $10 million on the potential of Laka's 'collective insurance' to improve bike coverage.

      The insurtech startup Laka, based in London, has secured $10.4 million in Series B funding as it aims for profitability by the end of next year. Laka provides “collective” insurance for bicycles and e-scooters, pooling claims among a community of riders. Instead of set upfront premiums, customers pay a variable monthly fee that depends on the total number of claims made by the entire user base, with a cap determined by the value of their equipment. Fewer claims lead to reduced costs for all.

      Laka offers insurance directly as well as through retailers such as Decathlon, Brompton Bikes, Gazelle, and Ribble Bikes. CEO and co-founder Tobias Taupitz stated that the company seeks to fundamentally change the traditional insurance model.

      “Conventional insurance is structured around fixed premiums, often resulting in overpayment for security,” Taupitz explained to TNW. “With Laka, we only profit when claims are made. Our success is tied to the success of our community.”

      Taupitz noted that insuring e-bikes can be both costly and complex, primarily because traditional insurers are not specialized in bicycles. "They frequently categorize bikes alongside gadgets or watches, failing to acknowledge that for many individuals, a bike is an essential element of daily life," he remarked.

      Nevertheless, collective insurance does pose challenges, particularly since it depends on low claim frequencies and a high level of trust among riders—factors that could lead to instability if accident rates increase.

      Despite potential challenges, Laka's model seems to remain stable, receiving mostly positive feedback online. The company currently provides insurance for 80,000 users across the UK, Netherlands, France, Germany, Belgium, Austria, Denmark, Portugal, and Luxembourg. Its growth can be partly attributed to a series of acquisitions.

      In October 2023, Laka acquired the French e-bike broker Cylantro, securing a local customer base and bringing founder Thomas Arnou into the fold to oversee French operations. A year later, it obtained the insurance renewal rights to the bike portfolio of UK-based CoverCloud. Most recently, in March, Laka took over Luko’s e-scooter insurance portfolio, adding over 20,000 French customers and marking its entry into the e-scooter insurance market.

      Laka has also expanded its services beyond insurance to include recovery services for stolen or damaged bikes and e-scooters. Additionally, it has initiated efforts to salvage and recycle old bike parts as part of a commitment to sustainability.

      The company aims to leverage growth in the micromobility sector, which, despite slowing down since the surge during the COVID-19 lockdown, continues to demonstrate steady expansion. According to McKinsey, the global micromobility market is expected to increase from approximately $160 billion today to $340 billion by 2030, with Europe predicted to lead with its market anticipated to grow from around $60 billion in 2022 to $140 billion by the decade's end.

      Laka's Series B funding round was co-led by Shift4Good and US-based MS&AD Ventures, with contributions from existing investors including Ponooc, Achmea Innovation Fund, Autotech Ventures, Motive Partners, Creandum, LocalGlobe, 1818 Ventures, and Republic (formerly Seedrs).