2016 early-stage insurance startup trend. SquareTrade's losses. This week in insurance tech.
Happy New Year
Hi there,
We’ve had some requests for how overall insurance startup investment fared in 2016 from subscribers and journalists, so we’ve compiled the numbers here.
Notably, two of every three insurance tech deals in 2016 took place at the early-stage (Seed/Series A). We’ll be breaking down these figures in other ways over the next few weeks.
We’d earlier highlighted this shift in buyer profile for $1B+ venture-backed U.S. companies in 2016, Allstate’s $1.4B acquisition of SquareTrade being the last of the year.
Today, Allstate released figures on SquareTrade’s business. Revenue at the extended services warranty provider has grown more than 5x since 2012, while losses came in at $26.5M in 2015.
The SquareTrade acquisition follows Allstate’s $1B+ acquisition of Esurance in 2011. Since the transaction, Esurance has doubled in size, but has not yet hit a profit.
Allstate clearly has the prospect of autonomous vehicles on its mind, with a new research agreement, patent filings and multiple job postings related to autonomous vehicles. Its 2015 Annual Report acknowledged driverless cars as a “risk factor”, after citing them as a “tremendous opportunity” a year prior.
Whether or not self-driving cars were a consideration at play in the now completed acquisition, how SquareTrade evolves under the diversifying Allstate will be interesting to watch. Its Arity telematics data business, which officially spun out in November, looks to now be partnered with at least one non-Allstate owned brand.
