French insurtech Luko has entered receivership following the collapse of a €14 million deal with incumbent insurer Admiral in late October.
The court-appointed administrator, Hélène Bourbouloux, dubbed the “Bankruptcy Madonna” by French press, is overseeing the new public bidding process, during which Luko has no influence on the terms of any potential deal. Potential buyers have until December 13 to submit fresh bids for Luko’s primary business, Demain ES, with the French commercial court set to determine the most favourable offer.
Luko, having raised €69 million from investors such as Accel and Speedinvest, faced a significant financial downturn when it failed to secure additional capital to cover debts totaling €45 million. Of this amount, €12 million was owed to shareholders of Unkle, one of the insurtech’s acquisitions.
According to reports, as Luko approached its hearing in the French commercial court, it sought an extension of its safeguarding plan to finalise a deal with a new buyer—revealed to be incumbent insurer Allianz. However, the insurtech’s cash position had further deteriorated, leading the court to place it into receivership.
Meanwhile Luko was quoted as saying: “Luko Cover, the broker and manager of contracts marketed by Luko, and Luko Insurance AG, the insurer of the Luko Group [are] separate entities… Luko’s insurance and brokerage activities therefore continue to operate normally.”
Recent court documents disclosed details that emerged before Admiral withdrew from the deal. Two audits revealed Luko’s €1.375 million tax contingencies, to be distributed among its creditor Triple Point, acquirer Admiral, and Luko’s founders.
Additionally, a fresh audit last month uncovered a €2.3 million discrepancy in insurance premiums between Luko Cover and those collected on behalf of third-party insurers. Even if Luko secures a new buyer on similar terms to the Admiral deal, existing shareholders are poised to face substantial losses.
Luko has so far declined to comment on the details of the process.
