Insurance Technology Showing Early Signs of Maturation

Venture Scanner

Last quarter we saw that Insurance Technology (insurtech) funding continued on a healthy trend. This quarter we are going one level deeper on our insurtech research platform to examine its funding by round. From our analysis we can conclude that the insurtech sector is showing early signs of maturation.

This conclusion comes from two takeaways:

  •      Funding amounts are showing variable innovation
  •      Funding counts are shifting to mid-stage events

We’ll explain these takeaways with some graphics that show insurtech funding activity by round.

To help set the stage, the graphic below illustrates insurtech funding events over time. As you can see, the sector’s funding events saw consistent growth year over year. 

Insurance Technology Funding Count by Quarter

Insurtech Funding Amounts Showing Variable Innovation

We’ll start off by examining the annual insurtech funding amounts. The below graph shows recent insurtech funding amounts in different rounds.

InsurTech Funding Amount by Round

Insurtech funding peaked in 2015, and has recovered slightly since. From this graph it's clear that total insurtech funding for these rounds is up over the past 5 years.

Let’s look at the insurtech funding amount by round as a percentage, which shows changes independent of the total size.

InsurTech Funding Amount Percentages

As we can see, there is some rather noisy turbulence within insurtech funding over the past few years. Each funding stage took turns experiencing ups and downs.

These two graphics show that the insurtech funding amounts are shifting all over the place without any clear trends. Therefore we can conclude that there is variable innovation within the sector.

So we have seen the funding amounts graphs indicate variable innovation. Would the funding event count graphs show the same picture? Let’s examine them in the next section to find out.

Insurtech Funding Counts Shifting to Mid-Stage Events

Let’s now look at the annual insurtech funding event counts. The below graph shows the insurtech funding counts in different rounds over recent years.

InsurTech Funding Count by Round

The above graph shows that insurtech funding counts in all rounds saw steady growth from 2012 to 2017. This corresponds with the general upward trend seen in the insurtech funding amounts graph.

Let’s now look at the insurtech funding count by round as a percentage, which can show shifts more clearly.

InsurTech Funding Count Percentages

This graph shows that from 2012-2017, the Seed round funding count percentage dropped. To compensate for that decrease, the funding count percentages for Series B and Series C increased. 

Specifically, the Seed round funding count dropped from 65% to 55% from 2012 to 2017. In contrast, the Series B funding count increased from 5% to 11%. The Series C funding count increased from 2% to 7%. The changes in all the other rounds were small enough to be negligible.

Combining these two graphics, we can see that insurtech funding counts shifted slightly from the Seed round to mid-stage from 2012 to 2017. 

Conclusion: The Insurtech Sector Is Starting to Mature Slightly

In conclusion, we see that insurtech funding amounts are showing variable innovation in all directions. Meanwhile, insurtech funding counts saw an increase in mid-stage events. These observations led us to conclude that the insurtech sector is showing early signs of maturation. Overall funding counts continue to show growth, but investors are finding more mid-stage companies to bet on.

To learn more about our complete Insurance Technology report and research platform, visit us at www.venturescanner.com or contact us at [email protected].

Share This Post: