Here is our Q2 2019 summary report on the insurance technology startup sector. The following report includes a sector overview and recent activity.
To learn more about our complete insurance technology dynamic report, visit us at www.venturescanner.com or contact us at info@venturescanner.com.
The insurance technology (insurtech) industry has seen 1437 investors and $28B total all time funding. Let’s analyze which insurtech categories have the most number of investors actively financing the startups. The graphic below highlights insurtech categories based on the number of investors in each category.
As the graphic demonstrates, Health Insurance has the highest number of investors at 357, with Insurance Comparison/Marketplace following behind at 323. Health Insurance companies offer health-related insurance products for consumers and businesses. Insurance Comparison/Marketplace companies enable consumers to compare different insurance providers or buy insurance of any kind (car to home to health). In addition, the average number of investors across all insurance technology categories is 195.
To learn more about our complete insurance technology dynamic report, visit us at www.venturescanner.com or contact us at info@venturescanner.com.
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:
The graph below shows the total VC funding into insurtech startups by year.
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.
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.
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.
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.
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.
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For this quarter’s funding analysis, let’s examine how average funding in the insurance technology (insurtech) sector is evolving. The graphic below shows the insurtech average funding across all deals over time by quarter.
As the graphic demonstrates, insurance technology average funding deal size in Q1 2019 was at $39M, which increased by 147% from the $16M in the same quarter last year. The average funding deal size has demonstrated upward growth, with the average funding last quarter around 3 times larger than it was 5 years ago. The top three 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.
To learn more about our complete insurance technology dynamic report, visit us at www.venturescanner.com or contact us at info@venturescanner.com.
This blog post examines the different components of the insurance technology (insurtech) 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.
Let’s start off by looking at the Sector Map. We have classified 1,541 insurtech startups into 14 categories. They have raised $28B from 1,447 investors. The Sector Map highlights the number of companies in each category. It also shows a random sampling of companies in each category.
We see that Insurance Comparison/Marketplace is the largest category with 416 companies. These companies enable consumers to compare different insurance providers or buy insurance of any kind (car to home to health). Some example companies are Goji, Policygenius, CoverHound, and Coverfox.
Let’s now look at our Innovation Quadrant to find out the funding and maturity of these categories in relation to one another.
Our Innovation Quadrant divides the insurtech categories into four different quadrants.
We see that the Pioneers quadrant has the most number of insurtech categories at 10, accounting for 71% of all insurtech categories. The Reinsurance category has the highest average age, and the Auto Insurance category has the highest average funding. On the other hand, the P2P Insurance and Consumer Management Platforms categories are low on both average funding and age.
To learn more about our complete insurance technology dynamic report, visit us at www.venturescanner.com or contact us at info@venturescanner.com.
Here is our Q1 2019 summary report on the insurance technology startup sector. The following report includes a sector overview and recent activity.
To learn more about our complete insurance technology dynamic report, visit us at www.venturescanner.com or contact us at info@venturescanner.com.
As we make our way through Q1 of 2019, let’s look back on 2018 and analyze how exit activity for insurance technology (insurtech) compares to previous years. The graphic below shows total annual insurtech exit events over time.
As the graphic demonstrates, 2018 saw a drop in insurtech exit activity compared to the previous year. The 22 exit events in 2018 represent a 44% decrease from the 39 exit events in 2017, which was the highest year on record for exit activity. However, insurtech exits are still on a general upward trend, with a 5-year CAGR of 22% from 2013 to 2018.
To learn more about our complete insurance technology dynamic report, visit us at www.venturescanner.com or contact us at info@venturescanner.com.
