Given the recent slew of alarming articles about insurtech businesses, you’d be excused for thinking the startup category was in trouble. Not even a smidgeon of it. Despite several significant public-market misfires from the industry in 2021, insurtech financing was healthy, as The Exchange recently reported. A number of insurtech businesses located in the United States went public in 2020 and 2021 after a successful fundraising round. The cohort has been destroyed by value drops after some early robust activity.
Following the debacle, we expected insurance-related startups to slow off, whereas upstart digital businesses focusing on the back end of the global insurance sector would become more active. Nonetheless, a handful of insurance-focused digital businesses were among the newest Y Combinator class, and some of them want to actually issue policies. Of course, not all, our guess about where insurtech entrepreneurs are focusing on current insurance sector mechanisms is proving correct. We were simply overly gloomy about the remainder of the insurtech space.
I can’t and won’t quit. It should come as no surprise that the insurtech startup sector is still alive and well. Following the remarkably robust figures of 2021, there’s reason to assume that 2022 will deliver more of the same. Here’s the lay of the land for insurtech startups in terms of funding, based on a Crunchbase query first generated by its News team and amended to include data from Q1 2021 and Q1 2022:
- Fundraising totaled $3.209 billion in the first quarter of 2021.
- Fundraising totaled $2.796 billion in the first quarter of 2022.
If you’re looking at the two statistics and wondering why we’re not making a big deal about a $400 million year-over-year drop, we can assist.
Crunchbase, PitchBook, and CB Insights’ venture capital data need to cope with the speed and breadth of private-market disclosures, which differ from what public businesses provide. They’re sluggish and incomplete. As a result, we anticipate the Q1 2022 number to “fill in” over time, bringing it closer to the year-ago comparable. The fact that insurtech funding has not collapsed is more important than any movement in the dollar amount. It is, in fact, still chugging ahead. We believe this is good news for the startups that are currently operating in the area. Let’s take a look at what they’re concentrating on.