How does a start-up, in a mature market, with no discernible tech advantage and very few customers command a billion pound valuation?<p>For example this week Marshmellow, which is an "insurtech", raised $85 million valuing the company at $1.25 billion.<p>This is interesting as in Britain (where third party car insurance is a legal requirement), online car insurance isn't new. I've managed our families car insurance online for at least a decade.<p>We have several big players Admiral, AXA, Direct Line who seem to offer a similar service, regularly innovate products and have millions of policies, compared to Marshmellows 100k.<p>Mashmellow's press release makes vague claims about "using a wider set of data points and clever algorithms" which surely any half-decent VC can see right through?<p>I routinely read about these valuations and shrug my shoulder and ask "why?". Am I too cynical? Should I just shut up, create my own company with a bunch of meaningless buzzwords and become a billionaire founder myself?
“If the people believe there’s an imaginary river out there, you don’t tell
them there’s no river there. You build an imaginary bridge over the imaginary
river.” -- Nikita Khrushchev
Dont be cynical. Do the math.<p>It usually boils down to some simple scaling formula. So work it out.<p>They say they are targeting expats (pulling driving data from multiple national dbs) which seems to be their differentiator from incumbents.<p>Say 5 coders + 10 sales guys acquire 1000 customers in 6 months costing 1 Mil.<p>So what can you pull off with 5 mil, then 20 mil, then 80 mil...