InsurTech venture investment keeps climbing ever higher, with new records reached for the second quarter as well as the first half of 2021, according to the latest Willis Towers Watson report on the sector.
Global InsurTech investment hit $7.4 billion in H1 2021, a number that exceeded investment in all of 2020 and every other previous year, the company’s Quarterly InsurTech Briefing determined.
Much of the H1 total was generated in the second quarter, with 162 deals that had more than $4.8 billion in investment behind them, a gigantic 210 percent increase over the 2020 second quarter. The Q2 number itself is a record, more than any annual total before 2019, Willis Towers Watson said. It reached so high because of 15 mega-rounds of $100 million or higher, raised by later-stage InsurTechs seeking to expand. Combined, those deals led to $3.3 billion, or two-thirds of the Q2 funding total.
Beneficiaries of the 15 mega-rounds included Germany-based digital insurer wefox, which raised $650 million for its gigantic Series C; and UK-based pet insurance MGA Bought By Many, which pulled in a $350 million Series D, according to the report. Among other noteworthy raises – Shift Technology pulled in a $220 million Series D, the report noted.
Another factor behind Q2’s deal bonanza – many of the fundings were Series B and C financings, which tend to be higher. But early-stage deals were also higher, growing by more than 9 percent than in the previous quarter and 200 percent from the 2020 second quarter, when the pandemic temporarily dampened deal activity. Early-stage deals accounted for 57 of the Q2 total, according to the report.
Here’s a breakdown of which kind of InsurTechs attracted the most Q2 funding:
- InsurTechs focused on distribution – 55 percent of startup deals and for 10 of the 15 mega-rounds. These startups were typically focused on reducing dependence on agent channels, Willis Towers Watson said.
- 73 percent involved P/C related InsurTechs.
- 43 companies raised funds for L&H technology
- 35 companies attracted funding in Q2, with new entrants from companies including Botswana, Mali, Romania, Saudia Arabia and Turkey.
Some in InsurTech are trying to better understand venture capital trends for what is a relatively new sector. InsurTech NY, the largest Insurtech community in North America, is launching a study focused on corporate capital. In announcing the project, InsurTech NY Managing Director David Gritz noted that it was needed to provide insight for an investment sector that’s less than a decade old.
Source: Willis Towers Watson