After months of legal wrangling, French insurtech Luko has finally found a buyer, Sifted has learned.
Allianz Direct, a subsidiary of German insurance giant Allianz, is poised to acquire the embattled startup for around €5m, according to a person with direct knowledge of the matter.
The deal still needs to be green-lighted by the French commercial court in charge of the case and a final ruling is expected today.
Once a rising star of French tech that raised $75m from top investors including Accel and Speedinvest, Luko filed for bankruptcy in June last year after its financial position deteriorated.
An initial deal that would have seen FTSE 100 insurance giant Admiral acquire the startup for €14m fell through a few months later when fresh audits of the business raised new accounting concerns.
It was reported that several competitors, including French insurtechs Leocare and Lovys, UK bike insurance startup Laka, and insurance companies Magnolia and Allianz, had since jumped in with bids to acquire Luko.
All bids were presented to the court earlier this month — Allianz’s offer emerged as the highest and retains Luko’s staff of 112 employees. The deal is expected to go through this month.
Allianz steps in
Allianz stepped in as soon as the €14m deal with Admiral fell through last October and initially put forward an offer to buy Luko for the same price, according to the source.
But with the startup’s cash position having significantly worsened, the court in charge of the case refused the offer and instead placed Luko into receivership, which reopened the bidding process to other companies.
The final offer of €5m keeps the same terms as Allianz’s first offer but means shareholders are set to lose a lot of money. Luko’s last fundraising round in 2020 — a $55m Series B — was backed by Accel, Speedinvest, Founders Fund and EQT Ventures.
What happened with Luko?
It’s been a sharp turn of fate for Luko, which acquired two insurtech rivals — Coya, based in Germany, and France’s Unkle — within 18 months of filing for bankruptcy.
The startup found itself in troubled waters after it was unable to raise fresh capital from investors to cover debts of €45m, €12m of which it owed to shareholders of Unkle.
It came to the end of its runway just as VC money started drying up — with many particularly reluctant to invest in capital-intensive insurtechs.
Sifted has contacted Luko and Allianz Direct for comment.
Update, January 24, 2024: Court documents seen by Sifted confirm that Allianz's offer was green-lighted to acquire Luko for €4.3m.
