RPC Insurtech in brief – June 2021
Welcome to the June edition of RPC of Insurtech in Brief, bringing you a handful of quick monthly industry updates.
Insurtech Wefox Raises $ 650 Million in Funding, Valuing Company at $ 3 Billion
German insurtech startup Wefox has raised a record $ 650 million from investors in a Series C cycle led by Target Global – the largest Series C cycle ever for an insurtech in the world.
As a result of this funding round, the company reached a post-currency valuation of $ 3 billion, making it a three times the unicorn. The funding means Wefox has tripled in value since the last fundraising in 2019. Wefox reports that it will use this funding to increase its presence in Europe and expand globally.
Wefox is a digital insurer focused on life and health insurance products, such as home insurance, auto insurance and liability insurance. Efficiency is achieved through automation. Wefox has invested in automation so that common processes are managed by an algorithm. Currently, 80% of its processes are managed automatically.
Wefox sets itself apart from many other insurtech startups by not selling directly to customers. Instead, potential customers buy Wefox policies from the company’s 700 agents. Agents sell nine out of ten policies in Europe, leaving direct competitors to consumers like Lemonade to fight for a smaller share of the market.
Wefox is also working on prevention. The company has assembled an AI team in Paris to advance its plans to provide a risk prevention service to its customers through an all-in-one insurance policy.
Bought By Many secures £ 78.4million investment in growth stocks
Bought By Many, a London-based pet insurance provider, secured a £ 78.4million growth capital investment led by FTV Capital, a US-based growth capital investment firm focused on financial services, as well as monitoring many existing investors.
The capital increase follows significant growth from Bought By Many, which launched its pet insurance policies in 2017 and now insures more than 200,000 pets. Bought By Many uses data to find gaps in the market and negotiate deals or create their own products to give consumers a better deal, and was the first pet insurer to offer an insurance claims process for pets online without form.
Sales of its policies for cats and dogs have increased by more than 150% in the past year, likely due to the boom in the number of pet owners during the pandemic. The Pet Food Manufacturers’ Association (PFMA) releases its annual pet population data, confirming that 3.2 million UK households have acquired a pet since the start of the pandemic, which means that there are now 34 million pets in the UK, including 12 million cats and 12 million dogs.
Bought By Many intends to use the financing to continue to expand, increase its market share in the UK and enable the development of its product and claims experience.
Insurance for cats and dogs is underwritten by Great Lakes Insurance SE.
Global insurtech investment hits record US $ 2.55 billion in first quarter 2021
After a brief COVID-19-related slowdown a year ago, fundraising in the global insurtech sector has rebounded, with global investment in the sector reaching a new quarterly high of US $ 2.55 billion in during the first quarter of 2021. The number of mega-towers (fundraisers of $ 100 million or more) has reached eight, more than any other three-month period, according to the new Quarterly InsurTech Briefing from Willis Towers Watson.
Total funding in the quarter increased 180% from the first quarter of 2020, which declined due to COVID-19. The latest total is up 22% from the more comparable Q4 2020, while the number of discrete trades is up 42% from the previous quarter. Investments were mainly made by companies specializing in non-life insurance, which accounted for 69% of the share of transactions.
This shows a great investor appetite for opportunities in the insurtech sector, possibly linked to the pandemic, prompting many insurers and other companies to step up their digitalization.
Read the full report here.
Life insurance start-up Ethos Technologies Inc. raised $ 200 million in fundraising
Life insurance start-up Ethos Technologies Inc. has secured $ 200 million in Series D funding from investors valuing the company at $ 2 billion, an impressive valuation for a company that started operations in June 2018.
The company is using innovative machine learning and data science technologies to challenge the traditional life insurance model. Ethos purchases life insurance in the United States without medical exams, blood tests or complex paperwork. Its website says what used to take weeks can now be done in minutes, and because of its expedited process, most customers get same-day coverage.
The investment, led by General Catalyst, benefited from the participation of existing investors including Sequoia Capital, Accel and GV. The startup has also attracted financial celebrities, including Roc Nation by rapper Jay-Z and investment vehicles from actors Will Smith and Robert Downey Jr.
Revenue and users have grown more than 500% year-over-year, and the company plans to issue $ 20 billion in life insurance coverage by the end of this year, which is a huge amount.
“We are on a mission to protect the next million families and will use that money to continue to improve the best insurance customer experience ever, ”said Peter Colis, co-founder and CEO of Ethos. “This funding will help us enrich our technology and data platform and help us launch new products to give everyone the opportunity to protect their families.“