Marshmallow got a great deal on its domain name.
Throughout the world, insurance is one of the most lucrative industries for providers. The motor insurance industry in the US, for example, is estimated to have a market size of $311 billion.
In the UK, it’s a similar story, where statistics show that in 2018, motor insurance providers made a total profit of £515 million (around $712 million).
With high potential profit margins, it’s unsurprising that newly formed companies are focusing on insurance products. Those startups are attracting significant funding, too.
A Crunchbase article from March 2021 suggests that “insurtech” (insurance technology) companies have raised a combined $20 billion over the past three years.
Insurtech successes include Alan, Lemonade, Hippo, and Oscar, which have all been valued at $1 billion or more. The latest insurtech company to join the illustrious Unicorn club is Marshmallow, a UK-based car insurance provider founded in 2017.
Marshmallow recently announced that it raised $85 million in a Series B funding round, resulting in a $1.25 billion valuation.
Naturally, Marshmallow owns and operates Marshmallow.com, but did you know that the company paid just $12,500 to acquire the domain in 2018?
According to NameBio, Marshmallow purchased Marshmallow.com for $12,500 in a deal facilitated by leading domain marketplace Sedo. That acquisition took place less than a year after the company was founded.
The purchase of Marshmallow.com, which was also made three months before Marshmallow closed its first funding round of $1.2 million, was an upgrade from Marshmallow.co, which the founders purchased before launching.
In comparison to other insurtech company domain purchases, the $12,500 fee paid for Marshmallow.com was peanuts.
It was recently revealed, for example, that the aforementioned Hippo paid $3.3 million to acquire its exact-match .com, Hippo.com, upgrading from MyHippo.com.
For Marshmallow to acquire Marshmallow.com so quickly and for such a comparatively low fee for a one-word .com domain shows tremendous foresight by its founders.
It also provided the perfect launchpad for Marshmallow’s business, which relies heavily on consumers visiting its website and requesting an insurance quote.