French insurtech Luko will have its fate decided on Wednesday in the French commercial court, after a deal to avoid insolvency fell through two weeks ago.
Luko is in live discussions with incumbent insurers Axa and Allianz, as well as insurance scaleups Leocare and Ornikar, about purchasing its French business on the same conditions of the Admiral sale, according to a person close to the deal.
The insurtech will ask the court on Wednesday to change its safeguard plan to enable a new buyer to take over the deal, the person said. A deal is expected to be reached in the coming days.
The insurtech’s original deadline for finding a new buyer had been November 7, but it obtained a seven-day extension from the court thanks to the advanced stages that its talks with these four parties had reached, the person said.
Luko had originally agreed a deal with FTSE 100 insurance giant Admiral in June this year to acquire its French business — Luko Cover — for around €14m. Its insurance portfolio is being sold as part of the deal.
But Admiral pulled out of the deal two weeks ago on the last day of the sale and purchase agreement (the last day by which an acquisition deal should close), over accounting concerns that emerged during the due diligence process, Sifted understands.
The €14m sale price is a mere fraction of the $75m (€69m) that Luko had raised to date from top investors including Accel, Speedinvest, Founders Fund and EQT Ventures.
The insurtech first filed to begin a safeguard procedure in France at the beginning of June, after failing to raise further capital.
At the time the Admiral deal was announced, Luko’s CEO Raphaël Vullierme wrote in a LinkedIn post: “Winning in this market requires time and money: it takes 8-10 years and €100m-150m to build a sustainably profitable B2C insurer in the P&C [property and casualty insurance] space.”
Luko agreed a deal to sell its German insurance portfolio to German rival Getsafe last month.
It’s now signed a binding offer with another party for the Unkle business it acquired in 2022, but is still searching for a buyer for the Coya business it acquired in 2022 (now called Luko Insurance AG, and which holds its German insurance licence), the person close to the deal said.
Luko declined to comment on the process.