Investors are pouring billions of dollars into startups aiming to give the insurance industry a tech makeover. In 2014, tech companies targeting the insurance space took less than $700M in funding. In just the first nine months of 2015, insurance tech startups have attracted more than three times as much funding, according to CB Insights data.
Insurance tech’s largest quarter by far was Q2’15, spiked by online benefits software and brokerage Zenefits‘ $500M Series C led by Fidelity and TPG, as well as a massive $931M financing by Chinese online insurance seller Zhong An Insurance. Excluding these two mega-financings, insurance tech funding clocks in at $354M for the quarter.
In Q3’15, deal activity into insurance tech startups matched a quarterly high set in Q2’15 at 26 deals, while funding finished the quarter at $454M.
Nearly 350 investors in insurance tech startups since 2011
Investors ranging from Andreessen Horowitz to Balderton Capital to Canaan Partners have expressed public interest in the insurance tech space. And many more have now made an investment. In 2011, just 45 investors (across all types) made an investment in an insurance tech startup. Through the end of Q3’15, that number has jumped past 380 investors. The Business Social Graph below visualizes the growth in insurance tech investors. (The graph’s green lines connect investors to the companies they’ve invested in.)
Financing trend by stage
Peeling back deal share to insurance tech startups by stage, we see Series A deal share accounting for 31% in the first three quarters of 2015 vs. 46% in 2013. After topping 40%+ in each of the past four years, Seed deal share to the insurance tech ecosystem has stood at 33% in 2015 year-to-date.
The Most Well-Funded Insurance Tech Startups
Within insurance tech, there is a growing group of very well-funded startups. Four startups including Zenefits, Oscar, and Collective Health have raised over $100M in equity funding while Clover Health, a data analytics and software startup focused on the Medicare Advantage market, has raised $100M in a combination of debt and equity. Internationally, PolicyBazaar and BankBazaar in India have each raised $70M+, and the the former is now valued at $210M.
| Company | Total Funding ($M) |
|---|---|
 (Zhong An Insurance) |
$ 931 |
 (Zenefits) |
$ 584 |
 (Oscar Health Insurance Co.) |
$ 328 |
 (Collective Health) |
$ 119 |
 (Clover Health) |
$ 100 |
 (BankBazaar) |
$ 79 |
 (Namely) |
$ 73 |
 (PolicyBazaar) |
$ 70 |
 (BIMA) |
$ 67 |
 (CoverHound) |
$ 56 |
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