Insurtech is hot on both sides of the Atlantic

Published June 11, 2021

The U.S. insurance technology market is hot and has been for years now. Back in early 2020, to pick an example, TechCrunch reported on a wave of funding events among domestic insurtech marketplaces. Those companies have since gone on to raise hundreds of millions of dollars more.

And after a long period of incubation, we’ve seen neoinsurance players from the U.S. like Root and Metromile go public. Hippo is working to join the cohort.

The Exchange explores startups, markets and money.

Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.

So from the perspective of venture capital activity, startup growth and exits, insurtech is proving itself in the States. Even if growth remains the name of the game in insurance tech and profits are often scarce.

What about other markets? The recent Wefox round caught The Exchange’s eye. A $650 million insurtech round would have commanded our attention regardless of its location. But to see a European insurance technology startup raise that amount of cash made us wonder if there’s as much money present for the EU market’s insurtech startups as we’ve seen here in the U.S.

After all, with business-focused neoinsurance provider Embroker raising a big round this week in the United States, to pick an example, it seems that attacking the massive and antiquated insurance market is good startup sport. Why wouldn’t that concept apply to Europe?

To find out more, we got in touch with a number of VCs from Europe to hear their perspectives on what’s happening on the ground, including folks from Accel, Astorya.vc and Insurtech Gateway. To ground us, we collated the biggest recent rounds from the EU insurance technology market. Let’s go!

A quick note on insurtech exits

Venture capitalists and startup founders get paid when they generate an exit. Lately, exits in the space have featured a number of IPOs.

The older a startup gets, the more it has to deal with public-market investors. Crossover funds and the like make their appearance before unicorns go public. And then former startups have to pitch not the venture capital market, but the public markets. It’s a different game.

That’s the impression that The Exchange got chatting with the CEO of Root, Alex Timm, this earnings cycle. He noted that public tech-focused investors don’t always grok the insurance elements of his business, while insurance investors don’t always grok the tech side of Root.