Original text here from Patrice Bernard (LinkedIn)
Since its early days around 2010, British FinTech has shown an enduring fascination (or perhaps obsession) with niche markets—students, immigrants, expats, influencers… While many of these efforts have ended in dead ends, a handful of standout successes have proven that the strategy has real merit.
One often-cited example is Revolut, originally built for frequent travelers before pivoting to a broader user base. But today, let’s take a closer look at Marshmallow, a UK-based insurtech that has zeroed in on one of the country’s most sought-after startup targets: migrants, especially those newly arrived. With 1.2 million new arrivals expected in 2024, and a declining native workforce, this group is both growing and economically vital—making it a compelling demographic.
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Marshmallow’s value proposition is surprisingly simple: it offers car insurance that factors in a person’s driving history from their country of origin. Legacy insurers, which often charge prohibitive premiums due to the lack of local driving data, routinely overlook this blind spot. As a result—and facing virtually no serious competition—Marshmallow has insured over one million customers since 2017, now generates £500 million in annual revenue, and is well on its way to profitability.
Naturally, the same access gap affects other areas of financial life. That’s why Marshmallow recently raised £90 million, aiming to replicate its auto insurance success in home insurance—and more ambitiously, in banking. In this arena, the biggest hurdle lies in credit scoring: traditional banks typically ignore foreign credit history, relying solely on domestic scores, which disadvantages migrants significantly.
Marshmallow’s goal is to become a go-to financial platform for migrants, covering all their financial needs. And it's well-positioned to succeed. The company’s personalized approach, paired with a strong commitment to diversity and inclusion—reflected even in its leadership—offers a genuine alternative to traditional providers. Most importantly, it offers competitive pricing, a key differentiator in underserved communities.
There’s a lesson here for incumbent institutions, which tend to operate with generalist, industrial-scale strategies. Despite many failed niche attempts, a focused and well-executed approach—backed by smart technology—can thrive in overlooked markets. As Marshmallow proves, personalization isn’t just a buzzword; it’s becoming a strategic necessity.
