Insurance Technology Innovation Primed For Growth

The insurance technology (insurtech) sector has seen much technological and investment development over the past few years. Traditional insurance business lines such as health, auto, and commercial are being revolutionized by new digital-centric startups. New technologies such as AI and IoT are re-architecting insurance data, the underpinning of the insurance industry. New business models, such as P2P and on-demand insurance, are disrupting the entire ecosystem on all fronts.

This blog post aims to examine how the rest of 2019 can shape up for the insurance technology industry. After conducting a thorough analysis of the sector, we have arrived at three predictions for 2019:

  • 2019 will see the highest insurtech funding on record
  • Health insurance technology will continue to dominate the industry
  • Insurtech startups will scale up in 2019

Prediction 1: 2019 Will See The Highest Insurtech Funding On Record

The graph below shows the total VC funding into insurtech startups by year.

Insurance Technology Funding Over Time
Insurance Technology Funding Over Time

As you can see, insurtech funding is on a general upward trend with a 5-year CAGR of 19%.

What’s most noteworthy on the chart is Q1 2019 funding coming in at $1.7B, a whopping 2.5 times higher than Q1 2018 and the best yearly start to date. A straight line projection would put the full 2019 funding at $6.7B, which would represent a 70% year-over-year growth and the highest annual funding on record. The largest insurtech funding events in Q1 2019 include a $500M round into Clover Health, a $129M round into FRIDAY, and a $125M round into the Wefox Group.

The dramatic funding growth and our 2019 projection demonstrate investor confidence in technology startups fundamentally advancing the insurance industry.

Prediction 2: Health Insurance Technology Will Continue To Dominate The Industry

Venture Scanner classifies chaotic startup landscapes into understandable groupings. These groupings are organized by functional categories, which are intended to get at the core offering of the startups categorized therein. For insurtech, we have broken the sector down into 14 functional categories. Analyzing them reveals a clearly dominant function: health insurance technology.

Insurance Technology Funding By Category
Insurance Technology Funding By Category

Health insurance technology startups lead the insurtech sector in overall funding at $8B. This category accounts for 33% of all insurtech funding and has almost twice the funding of the second highest category–life, home, P&C insurance. In addition, health insurance technology startups raised the most funding this past quarter (Q1 2019) at $650M. Some of the largest funding rounds into health insurance in Q1 2019 include a $500M Series E into Clover Health, a $74M Series B into Shuidihuzhu, and a $45M Series B into Alan.

Health insurance technology startups focus on producing innovative business models and technology products. A notable example in the space is Oscar Health. They provide customized health insurance plans for individuals and businesses. Their website and mobile app enable you to manage all your health information and access doctors 24/7. The Oscar Health mobile app also incentivizes healthy behavior. For example, it tracks your daily steps and if you meet your daily step goal, you earn money for gift cards.

Prediction 3: Insurtech Startups Will Scale Up In 2019

Our third prediction is that insurtech funding events will shift to later-stage financings as a result of insurtech startups experiencing increased market traction. Over the past 5 years, seed-stage funding events made up roughly 50% of all funding events into insurtech. In Q1 2019, seed-stage events dropped to 20%, while mid and later-stage funding events grew to represent a much larger portion of total funding events.

By the same token, the average funding per deal in insurtech has been growing steadily. Specifically, over the last 5 years, average funding has grown from $9M to $39M per deal.

The movement towards later-stage funding events and an increase in average deal sizes lead to the natural prediction that insurtech startups will continue to gain traction in the coming years. Realizing that their returns are directly tied to the scale of their bets, VCs are not hesitating to double down on their investment sizes to gamble for greater payoffs. These follow-on bets in the form of later-stage investments will help insurtech startups scale their operations and amplify their market share.

Conclusion: 2019 Will See Unprecedented Innovation In Insurtech

In conclusion, the observations and analyses above lead us to predict that insurtech startups are primed for explosive growth, scaling, and maturation. We predict that 2019 will be the highest funded year on record, that health insurance technology startups will continue to dominate the industry, and that insurtech funding events will increase in maturity and size over time.

Venture Scanner is Research Reinvented. To learn more about how our dynamic reports can provide the insights you need to innovate, visit www.venturescanner.com or contact us at info@venturescanner.com.

Energy Technology Report Highlights – Q1 2019

Here is our Q1 2019 summary report on the energy technology startup sector. The following report includes a sector overview and recent activity.

To learn more about our complete energy technology dynamic report, visit us at www.venturescanner.com or contact us at info@venturescanner.com.

Retail Technology Sector Overview – Q1 2019

This blog post examines the different components of the retail technology ecosystem. We will illustrate what the categories of innovation are and which categories have the most companies. We will also compare the categories in terms of their funding and maturity.

Marketing Platforms Is The Largest Retail Technology Category

Let’s start off by looking at the Sector Map. We have classified 1873 retail technology startups into 21 categories. They have raised $85B from 3189 investors. The Sector Map highlights the number of companies in each category. It also shows a random sampling of companies in each category.

Retail Technology Logo Map
Retail Technology Logo Map

We see that Marketing Platforms is the largest category with 271 companies. This category includes companies that enable merchants to execute and manage marketing campaigns. It also contains customer relationship management tools used to improve customer engagement. Some example companies in this category include Showpad, Sprinklr, Gainsight, and Medallia.

Let’s now look at our Innovation Quadrant to find out the funding and maturity of these categories in relation to one another.

The Established Quadrant Has the Most Retail Technology Categories

Our Innovation Quadrant divides the retail technology categories into four different quadrants.

Retail Technology Innovation Quadrant
Retail Technology Innovation Quadrant

We see that the Established quadrant has the most number of retail technology categories at 13, accounting for 62% of all retail technology categories. The Made-to-Measure Customization category has the highest average age, and the Last Mile Logistics category has the highest average funding. On the other hand, the In-Store Management category is low on both average funding and age.

To learn more about our complete retail technology dynamic report, visit us at www.venturescanner.com or contact us at info@venturescanner.com.

Blockchain Technology Average Funding Dipped After Years of Growth

For this quarter’s funding analysis, let’s examine how average funding in the blockchain technology sector is evolving. The graphic below shows the blockchain technology average funding across all deals over time by quarter.

Blockchain Technology Average Funding Deal Size
Blockchain Technology Average Funding Deal Size

As the graphic demonstrates, blockchain technology average funding deal size in Q1 2019 was at $19M, which increased by 8% from the $17M in the same quarter last year. The average funding deal size has experienced robust growth, with the average funding last quarter around 7 times larger than it was 5 years ago. The top three funding events in Q1 2019 include a $90M round into Ground X, a $65M round into Figure, and a $50M round into Dorae.

To learn more about our complete blockchain technology dynamic report, visit us at www.venturescanner.com or contact us at info@venturescanner.com.

Security Technology Average Funding Is On An Upward Trend

For this quarter’s funding analysis, let’s examine how average funding in the security technology sector is evolving. The graphic below shows the security technology average funding across all deals over time by quarter.

Security Technology Average Funding Deal Size
Security Technology Average Funding Deal Size

As the graphic demonstrates, security technology average funding deal size in Q1 2019 was at $29M, which increased by 53% from the $19M in the same quarter last year. The average funding deal size has experienced slight growth, with the average funding last quarter approximately on par with the average funding 5 years ago. The top three funding events in Q1 2019 include a $261M round into Rubrik, a $150M round into Cloudflare, and a $100M round into OneLogin.

To learn more about our complete security technology dynamic report, visit us at www.venturescanner.com or contact us at info@venturescanner.com.

Smart Mobility Leads Transportation Technology In Number of Investors

The transportation technology industry has seen 2,709 investors and $162B total all time funding. Let’s analyze which transportation technology categories have the most number of investors actively financing the startups. The graphic below highlights transportation technology categories based on the number of investors in each category.

Transportation Technology Investors Per Category
Transportation Technology Investors Per Category

As the graphic demonstrates, Smart Mobility has the highest number of investors at 635, with Enhanced Auto Ownership following behind at 588. Smart Mobility companies provide solutions for increasing sustainability in how transportation is conducted within cities. Enhanced Auto Ownership companies allow for new methodologies to buy, rent, and own cars. In addition, the average number of investors across all transportation technology categories is 277.

To learn more about our complete transportation technology dynamic report, visit us at www.venturescanner.com or contact us at info@venturescanner.com.

IoT Home Leads Real Estate Technology In Number of Investors

The real estate technology industry has seen 2,714 investors and $73B total all time funding. Let’s analyze which real estate technology categories have the most number of investors actively financing the startups. The graphic below highlights real estate technology categories based on the number of investors in each category.

Real Estate Technology Investors Per Category
Real Estate Technology Investors Per Category

As the graphic demonstrates, IoT Home has the highest number of investors at 697, with Home Services following behind at 580. IoT Home companies produce connected devices focused on the residential real estate segment. Home Service companies build technologies that support tenants in the management of their homes. In addition, the average number of investors across all real estate technology categories is 372.

To learn more about our complete real estate technology dynamic report, visit us at www.venturescanner.com or contact us at info@venturescanner.com.