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Cycling insurtech platform Laka has rallied over 1,000 investors to help them build a new model for insurance – one that’s better for everyone involved.
Challenger banks have swept through the finance space in recent years, with innovations that have drastically improved the customer experience. However, the insurance space has been slower to evolve. Customers are accustomed to paying upfront, in the hopes that future claims will be settled later on. However, those insurers profit from not paying out claims, meaning that a successful, smooth claims process is the exception rather than the rule. It’s not a model that’s built for consumers, and Laka decided a change was long overdue. So, with the backing of top VCs LocalGlobe and Creandum, they flipped the age-old model on its head with collective cover for cyclists, to enable faster, simpler and cheaper insurance for all.
How does the collective work? Laka’s members share the cost of all claims, and Laka only earns their share when settling claims for the collective. Instead of charging an upfront monthly sum, they calculate your monthly contributions retrospectively, up to a max capped amount, based on the collective’s claims. 80% of that money goes toward fixing, replacing, and supporting the needs of the collective, to keep everyone’s wheels spinning. The remaining 20% goes toward the growth of the business. In essence, the model involves charging the Laka collective based on the actual cost of claims incurred rather than those that might. Moreover, unlike traditional insurance contracts, when you join the collective, you’re never locked in. You can leave at any time with no penalty.
The result is a loyal tribe of avid cyclists, passionate about the gear that gets them from A to B efficiently and safely, and confident that if something does go wrong, they’re covered. To date, Laka has insured over 10,000 bikes worth over £26 million and maintained a 4.9/5 customer review rating. Not only do Laka cover theft (at home and on the go), they’ll settle claims on behalf of the collective that span from damage, to vandalism, equipment loss and health and recovery insurance – all without any catches, questionable fine print or long, inefficient claims processes that are more hassle than they’re worth.
The demand for Laka’s insurance offering is proven. With more and more commuters switching to two wheels in the wake of Covid-19, bikes have soared in popularity – and with 376,000 bicycles stolen every year in the UK alone, the need for quality, reliable insurance is greater than ever. With net revenue reaching 215% growth in 2020, Laka are gearing up to take the business to the next level, starting with expansion into the Netherlands later this month. Further down the line, Laka intends to bring their innovative, game-changing insurance model across Europe and beyond.
And it doesn’t stop at bikes. Laka is dedicated to revolutionising the e-mobility market from the inside out, expanding service to a wide range of personal mobility users, including urban and e-mobility, through new and existing products. These services include a range of revenue opportunities via new products, partnerships and collaborations, such as their recently launched Rapha x Laka clothing range.
The time of the bike is now, and Laka is just getting started. To join the investors helping to change insurance for good, visit the crowdfunding campaign.