Within the US, just 32% of insurance tech deals went to health insurance startups as deal activity did an about-face and shifted to non-health insurance areas.
In Q1’11, fewer than 10 insurance tech startups raised a financing round. Fast forward to Q1’16 and insurance tech notched its strongest quarter ever on the deal front with more than 45 deals totaling $650M in funding, according to CB Insights data.
On the funding front, Q1’16 marked the second-largest quarter for insurance tech, in large part due to health insurance carrier Oscar‘s $400M mega-round led by Fidelity Investments. Oscar’s round accounted for just over 60% of the funding in the three month period. We’d earlier highlighted Q1’16’s top insurance tech startup hires and 10 largest deals, which totaled $601M in aggregate.
Over half of Q1’16 activity at seed-stage
Breaking down insurance tech deals in Q1’16 by stage, we see that deals at the seed/angel stage comprise 53% of all activity. Series A activity took 13% of deals in Q1’16, as the majority of investments into the insurance tech space skew toward early-stage deals including into yet-to-launch insurance startups like Next Insurance and Slice Labs. Other insurance startups that are venture-backed but yet to officially launch include P2P insurer Lemonade, online small business brokerage Embroker, and life insurance startup Ladder Life.
60% of insurance Q1’16 deals in US
Not surprisingly, the large majority of insurance tech deals in Q1’16 went to US-based startups. Fewer than 5 deals each went to the UK, Germany, Canada, and India.
Within the US, 32% of insurance tech deals in Q1’16 went to health insurance startups. We’d earlier highlighted that as early-stage investments move beyond health coverage to small business, renter’s, life insurance and other areas, 2016 could see about-face in US deal share. The shift has happened and now two-thirds of deals have gone to areas outside of insurance.
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