More than half of the start-ups that raised cash in Q1-2020 were based in the U.S.
The latest Insurtech Quarterly Briefing for the First Quarter of 2020 (Q1-2020) is out and, unsurprisingly, the latest data points to the beginnings of a sharp decline in funding for the year 2020. While global insurtech investment raised in Q1-2020 was approximately $913 million during the first three months of the year, it is important to note that Willis says that almost the same amount of money was raised in the last three weeks of the quarter as in the first three days. Moreover, over 57% of the deals were based in the U.S. with an additional 10% coming from the U.K. reflecting the later arrival of the COVID-19 pandemic in these two countries as opposed to Asia.
In commenting on the briefing, Dr. Andrew Johnston, global head of InsurTech at Willis Re, noted the unusual trajectory that Insurtech investments will likely have this year. “This has been a particularly interesting quarter for global InsurTech. It is clear that COVID-19 has had a material impact on later-stage investments, and (re)insurers are holding back. Despite the very large percentage drop this quarter when compared with the last, we are still seeing a huge amount of activity in early-stage funding rounds, across a very large number of deals. The relative downturn of (re)insurer participation in this round would explain why we have seen fewer megadeals, affecting the overall amount raised significantly, which is not surprising as (re)insurers increasingly participate in later stages. Again, COVID-19 is a likely culprit for less engagement from industry capital as (re)insurers focus their attention on other, perhaps more pressing issues.”
Massachusetts & New England insurtechs that announced funding in Q1-2020
The following are five insurtechs based in New England, four in Massachusetts and one in Vermont, that announced funding rounds in Q1-2020. Together, the investments in these start-ups totalled $77.5 million in funding for the first quarter of the year.
|Company Name||Funding Round||Total Funding To Date||Funding Date||All Investors|
|Corvus Insurance||$32 million||$46 million||January 3, 2020||406 Ventures; Bain Capital Ventures; Hudson Structured Capital; Management; Obvious Ventures; Telstra Ventures|
|Insurify||$23 million||$31.7 million||January 15, 2020||Giorgos Zacharia; Hearst Ventures; MassMutual Ventures; MTech Capital;|
Nationwide Ventures; Rationalwave Capital Partners; Undisclosed Investors; Viola Group
|Wunderite||$.05 million||$0.05 million||February 26, 2020||BrokerTech Ventures|
|Hi Marley||$8 million||$16.75 million||March 20, 2020||True Ventures; Underscore VC|
|DealerPolicy (VT)||$14 million||$30 million||March 23, 2020||MTech Capital; Undisclosed Investors|
Other highlights from the latest data
The total deal count for this quarter was 96, reflecting a 28% increase over Q4-2019 numbers. It is also 10% more than in the Q1-2019. With that said, however, Willis emphasized that funding overall had decreased 54%, reflecting a huge decrease in the number of ‘mega-deals’, defined as $100 million or more. In fact, only one such deal was noted during this quarter, the announcement of a $100 million Series D investment in the U.S.-based PolicyGenius. In comparison, the report states that both Seed and Series A funding saw a 9% decrease versus Q4-2019, but early-state deal counts actually rose three percentage points to 51% of all deals.
The briefing also notes for the first time since Q3-2016, Property & Casualty insurtechs increased their share to 83% of all insurtech funding versus life and health funding. Finally, Willis notes that “…B2B-focused companies accounted for 55% of recorded deals in Q1 2020, a 121% increase from Q4 2019.”
A new format for a new decade
Aside from the latest insurtech funding data, the Insurtech Quarterly Briefing also announced a new format for as Insurtech officially enters its second decade. Going forward, the quarterly briefing with do a “deep dive into the InsurTech phenomenon in specific classes of business”. Beginning with the current issue, the briefing takes a look at various auto-focused insurtechs including Buckle, Miles, OCTO, as well as a spotlight on Concirrus, a specialty lines insurtech.