Insurance startup Gig Economy cachet raises $5.7 million

  • Cachet, an Estonian startup that offers an insurance marketplace for temporary workers, raised $5.7 million.
  • The company offers “data-based pricing” by aggregating worker data on gig platforms.
  • Cachet plans to spend the new funds on expanding its services across Europe.

Estonia-based startup Cachet aggregates data on temporary workers to offer personalized insurance coverage based on hours worked across multiple apps.

The startup raised $5.7 million (€5.5 million) in a seed/Series A round led by venture capital firm Truffle Capital. The new funds bring its total raised to $7.26 million (€7 million). Venture capital firms Uniqa Ventures and also joined the round.

The market offers insurance plans for temporary workers at a rate they say is 47% cheaper on average than standard insurance plans. It covers independent contractors working simultaneously for Uber, Bolt, Deliveroo and TaskRabbit, among others.

The idea behind Cachet is to offer insurance plans that accurately represent temporary workers’ hours and activity, without requiring them to only work for one company. “Platform workers are not loyal to just one rig. So if we take any area, whether it’s carpooling or delivery, they work at least two, if not more rigs at the same time,” said co-founder Hedi Mardisoo.

Cachet currently has operations in Estonia, Latvia and Poland, and is eyeing the Nordic states as its next market for expansion, according to Mardisoo.

Meanwhile, the EU is deliberating on a gap in current regulations for temporary workers. The European Commission’s Platform Workers Directive, introduced in December, would mark a sea change in Europe’s gig economy. If approved, the onus would be on tech companies to prove that a worker is not an employee and therefore not eligible for benefits such as insurance.

Insurance options on the Cachet market are sourced from at least 12 insurance underwriters and include civil liability, motor and micromobility insurance, and personal health and accident coverage.

Cachet was founded in late 2018 by Mardisoo, former head of corporate affairs at banking group Swedbank, and Kalle Palling, former member of the Estonian Parliament. Palling, who was first elected to Parliament in 2007 at age 22, served as chairman of Parliament’s European Union Affairs Committee.

While in Parliament, Palling was the architect of policy measures regulating ridesharing that put in place standardized licensing and quality processes for private drivers and taxi drivers. However, the issue of insurance for Uber drivers, as for temporary workers at other tech companies that do not directly provide insurance for contract workers, has not been resolved.

“Everything was perfect for the platforms, which means they were allowed to operate by the books. But the only option for the driver was to buy full-time taxi insurance,” Palling said.

Cachet has ambitious plans for 2022, including tripling its workforce by the end of the year. He is hiring for roles such as director of insurance, country manager, expansion manager and content marketer.

Check out the 13-slide pitch deck that Cachet used to raise $5.7 million in its latest round.

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