Insurtech startup investment rebounded to more than a billion dollars in the second quarter of 2020, gaining 71% compared to the first quarter and with a slight increase compared to the same time period last year. However, volume was concentrated with later-stage companies, with the lowest percentage of deals on record going to early stage companies.
That's according to Willis Towers Watson's Quarterly Insurtech Briefing. About four in 10 of funding rounds were in seed/angel or Series A, a record low and 9% lower than Q1. Clmpared to the same time period of 2019, the early-stages were down 15%, while Series B and C went up by 3%. There was a nominal drop in Series D and E funding rounds as well.
But overall, it was a big quarter for big numbers. There were 11 deals of $40 million or more, matching the most on record for a quarter since tracking began in the sector.
The trends in the activity coupled with the continuing coronavirus crisis mean that insurtech is even more slippery to predict than before, writes briefing editor Andrew Johnston, global head of Willis Re Insurtech.
"While insurtechs are probably much more adept at hibernating than their incumbent relatives, if the use case of a business has been lost forever through fundamental change, or the prospect of ever 'making it' now seems (more) unlikely, then many founders may cut their losses and move on," he says.
