Global InsurTech funding reaches all-time high in 1Q2021
Source: Middle East Insurance Review | Jun 2021
InsurTech funding reached an all-time high raising $2.55bn across 146 deals in the first quarter of 2021, according to the global Quarterly InsurTech Briefing released by Willis Towers Watson in April.
InsurTech total funding grew by 180% when compared to the first quarter of 2020, after a precipitous drop in funding as fears surrounding the COVID-19 pandemic reached its pinnacle. Compared to the fourth quarter of 2020, total funding grew by 22% as investment activity steadily bounced back. The number of deals also grew by 52% from 1Q2020 and 42% from the previous quarter.
P&C-focused InsurTechs continue to drive the majority of investment activity, representing 69% of deal share, with L&H representing 31% – a two-percentage-point increase from 4Q2020.
This quarter saw a record number of mega-rounds. Eight companies represented over $1.13bn in funding, or 44% of total funding raised. The increase in deal activity was driven by a more than 12% increase in early-stage deals compared to the fourth quarter of 2020. About 60% of this quarter’s deals went to early-stage companies.
InsurTech investments across more countries
The US has been a long-standing InsurTech hub but growth of InsurTech in new geographies is on the rise. In 2020, InsurTech from 38 different countries raised investment against 29 in 2016. In the first quarter of 2021, US InsurTech deal share grew to 48%, up three-percentage-points compared to the fourth quarter of 2020, but US activity has not rebounded to pre-pandemic levels. In Q1 2020, US-based companies represented over 57% of global InsurTech deals – a near nine-percentage-point deficit year-on-year.
Meanwhile, the international cohort of InsurTechs has been driving a growing share of activity. The first quarter of 2021 marked the most geographically diverse set of early-stage start-ups in a single quarter, representing 24 countries including Bangladesh, Estonia, Brazil, Nigeria and the UAE. M