Laka has secured £3.6m funding to expand its bicycle InsurTech across the EU.

The London start-up plans to set up a European HQ in Amsterdam following backing from some big-name investors.

The round was led by VC firms LocalGlobe and Creandum, which have previously backed TransferWise and Zego, and Spotify and Klarna, respectively.

It was supported by Yes VC – founded by Flickr co-founder Caterina Fake – Jaiku and Ditto co-founder Jyri Engeström and prominent angel investors.

Laka’s insurance product offers theft, damage, travel, race and emergency cover. 80 per cent of cash coming in from customers goes towards fellow members who have damaged or lost their bike.

Remus Brett, Partner at LocalGlobe, commented: “The beauty of Laka is it returns insurance to its pure, mutual heritage. Laka’s members and their shared interests incentivise positive behaviour which in turn benefits the entire community.

“These principles are over 300 years old, the difference being technology and increasing consumer awareness that traditional insurance models, with complex clauses, excesses and a painful claims process are fundamentally broken.”

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Carl Fritjofsson, Partner at Creandum, concluded: “The word disruption is used all too often in the world of entrepreneurship, but with Laka it actually fits very well.

“This is a fundamentally unique and different approach that turns the old business model of insurers upside down.

“Laka truly improves the user experience 10x as well as lowers costs for its policyholders, all while providing a fair and transparent insurance coverage. What’s not to love?”