U.S.-Based InsurTechs Grabbed Most of the Q1 2021 VC Dollars: Forrester

Approximately 94 percent of InsurTech venture capital financing went to U.S.-based startups during record fundraising for the sector in the 2021 first quarter, according to Forrester’s latest sector roundup.

VC money for the sector reached the $5 billion mark, a level that quintupled from the same year-ago period. There’s a catch: One company, Michigan-based broker Acrisure, attracted the bulk of the funding.

Acrisure pulled in a stunning $3.4 billion capital raise, which bumped the total number substantially higher, Forrester noted. Without it, the $1.6 billion total is closer to the $2.5 billion in first quarter financing calculated by Willis Towers Watson in its own 2021 first quarter assessment. Both calculations include P/C and health insurers.

Other statistics from the Forrester report:

• Forrester counted 261 global deals, in which 54 startups received funding. The medium funding raised by startups was $12 million, and there were five deals above $100 million.

• 82 percent of funding went to early-and seed-stage investments.

• Digital insurers focused on enterprise and commercial insurance were a big draw during the quarter, receiving 87 percent of the funding. By contrast, InsurTech startups focused on operational change raised 10 percent of total funding, and comparison marketplaces raised 3 percent of total funding.

• A number of established firms are investing in InsurTechs, including the investment arms of many insurers: AXA Venture Partners, Allianz X, Nationwide Insurance, Markel Corp., Ping An Global Voyager Fund, Aflac Corporate Ventures, Guardian Life, American Family Ventures and Liberty Mutual Strategic Ventures.

Source: Forrester