According to this publication’s analysis, $2.05bn in new funding has been announced between the start of July and 28 September. This does not include an undisclosed post-Series D investment in Next Insurance by MS&AD Ventures.
A total of 45 non-life insurtech-related funding announcements were made in the period.
Our data set only includes non-life P&C-related entities, and does not include life, health and other segments reflected in some third-party analyses of the sector.
The total raised so far in the third quarter is some way behind the record Q2, when over $2.72bn in new funding was raised across the 46 transactions for which this metric was recorded.
However, the third quarter total is still historically high and surpasses the levels seen before this year.
Breaking the data down by month, July had the fewest deals while August was the smallest in terms of total value.
Q3’s largest rounds
The third quarter to date has included seven non-life insurtech capital raises of $100mn or more. The quarter was also notable for three insurtechs achieving unicorn status – At-Bay, Bolttech and Marshmallow.
The largest fundraise in the third quarter came from cyber insurtech Coalition, which near the end of September raised $205mn in Series E funding. This took the San Francisco-based company’s total funding to date to more than $500mn and valued it at more than $3.5bn.
In March, the fast-growing MGA – which is backed by Swiss Re Corporate Solutions, Arch Insurance, Lloyd’s and Argo Group – had secured an additional $175mn of equity funding in a financing round that valued the business at $1.75bn and gave it unicorn status.
The second largest raise in the quarter so far came from Indian insurtech Digit Insurance. In July it raised $200mn from existing backer Faering Capital and new investors Sequoia Capital India, IIFL Alternate Asset Managers and others.
The round valued the Bengaluru-based company at $3.5bn. Digit said the funding brought its total capital raised to $442mn and represents one of the largest rounds in the Indian insurance industry.
Digit was set up in 2016 by chairman Kamesh Goyal, who previously ran Allianz’s Indian business, with backing from Prem Watsa’s Fairfax, which has invested $140mn across a number of rounds.
The company offers motor and health insurance, as well as other lines such as travel insurance.
The next largest Q3 fund raise came from cyber insurtech At-Bay, which in July raised $185mn in Series D funding co-led by Icon Ventures and Lightspeed Venture Partners. The round, which included existing investor Munich Re Ventures among the other participants, brought the San Francisco-based company’s valuation to $1.35bn.
The Series D funding marked the company’s third round in the past 18 months and brings its overall funding to $272mn.
At-Bay said the new investment will enable it to accelerate and deepen its product offerings and expand into new markets.
The fourth largest fund raise came from Bolttech with a $180mn Series A round in July led by Activant Capital Group.
Bolttech – which is led by former AIG executive Rob Schimek and claims to be the largest insurance exchange in the world – said that the round was the largest ever A round for an insurtech.
The round gave Bolttech unicorn status only a year after it was launched by Asia-based private equity firm Pacific Century Group. The insurtech said the investment will accelerate growth and plans to consolidate what it said is its leading position in the US. In an interview with The Insurer in July, Schimek said his firm is looking to rapidly expand the $5bn of premium already placed on its insurance exchange platform including through meaningful commercial lines growth.
Bolttech in September revealed it had extended the Series A funding to $210mn as the result of two new strategic investors.
The fifth-largest raise so far in Q3 was Envelop Risk in September raising $130mn in Series B funding led by SoftBank.
It is thought to be the first direct investment in the P&C specialty/reinsurance space by the world’s largest tech investor.
UK-Bermuda cyber reinsurance MGA and modelling firm Envelop Risk said it will use part of the funds raised to set up a hybrid balance sheet model that will allow it to deploy its own risk capital in alignment with existing partners.
The financing will facilitate Envelop Risk’s plans to expand its proprietary machine learning and data-driven underwriting activity in London and Bermuda, with the MGA also intending to use the fresh capital to fuel growth into new markets globally and beyond cyber (re)insurance.
The other two insurtechs with $100mn-plus rounds this quarter were auto insurance marketplace DealerPolicy with a $110mn Series C round – led by Goldman Sachs Asset Management with participation from existing investors including Hudson Structured Capital Management – and virtual insurance agent and comparison platform Insurify with a $100mn Series B round.
The two largest deals below $100mn were also notable.
Vouch in September raised $90mn in funding – a $60mn Series C co-led by SVB Capital and Ribbit Capital and a previously unannounced $30mn Series B1 led by Redpoint Ventures. This gave the San Francisco-based business insurance platform for start-ups a $550mn valuation.
Along with the fund raise, Vouch announced a strategic partnership for SiriusPoint to provide underwriting capacity, with the Bermudian (re)insurer also among the investors. Vouch also confirmed to this publication that Munich Re is no longer among its reinsurers.
Also in September UK motor insurtech Marshmallow raised $85mn from investors in a Series B round. That valued it at more than $1.25bn and made it one of the first British Black-founded tech unicorns.
Majority of deals in US
Of the deals announced so far in Q3, 56 percent of insurtech companies with funding activity were US-based.
Outside the US, insurtechs attracting capital raises this quarter included four companies based in the UK and three in Israel.
Some 38 of the 45 non-life transactions recorded – or 84 percent – corresponded to early-stage investment rounds (seed to Series B rounds).
In terms of subsector, one of the capital raises was related to the B2C space – an $18mn raise from Swedish insurtech Insurello. The remaining 44 capital raises recorded in the period were almost evenly distributed between B2B services, distribution and carriers.
In terms of value, distribution was the largest subsector, attracting 39 percent of the funding recorded.
