Global Insurtech funding stabilises and is expected to reach $4.2 billion by the end of 2024

November 5, 2024

• The third quarter of 2024 closed with an investment in insurance technology (Insurtech) of $3.2 billion, 7% less than in 2023. However, the trend is positive and suggests a rebound in funding in the fourth quarter, marking the ecosystem’s stability at 2018 levels.
• The stabilisation in insurtech funding is being led by breakout-stage companies (Series B and C), which are showing notable recovery and approaching pre-pandemic funding levels. Early-stage start-ups (pre-seed, seed, and Series A) are also contributing to this stabilisation. 
• In contrast, late-stage start-ups continue to face challenges, with funding levels lagging behind, reflecting the broader market’s cautious stance on mature, high-valuation companies.
• By region, the United States continues to be the main driver of growth, with an investment of $1.8 billion. Europe is next with $1.1 billion. This highlights a significant gap compared to emerging markets such as Africa and Latin America, with funding of $32.4 million and $37.1 million, respectively.
• 43% of insurtech funding has been captured by B2B Software as a Service (SaaS) start-ups. This includes providers of payment solutions, risk management and underwriting software, or claims management and administration. Many of these companies base their offerings on artificial intelligence (AI) or are expanding their portfolios with new AI products. 

London, UK – 5 November 2024 – Venture capital funding in insurance technology (insurtech) start-ups is seeing signals of stabilisation driven by the breakout-stages start-ups (the ones in Series B and C founding stages). Specifically, it is expected to reach $4.2 billion by the end of 2024, similar to the figures in 2018 and 2023.

During the first three quarters of the year, funding has reached $3.2 billion, 7% less than in 2023. Nevertheless, the trend is positive and suggests a rebound for the year’s final stretch. Late-stage start-ups (those seeking funding rounds of over $100 million) are experiencing the greatest decline, with a drop of nearly 90% compared to their 2021 peak. However, these will drive the final funding push before closing 2024, as many have been working on reinforcing their unit economics to be ready for the exit in the upcoming years.

These are some of the main conclusions from the report ‘The State of Global Insurtech,’ prepared by Dealroom.co, Mundi Ventures, and MAPFRE. This is the fourth edition of a report that analyses the state of the insurtech industry, providing transparency through qualitative data and information on trends and the current state of the sector.

Early-stage and late-stage start-ups still far from their peaks

While the lack of funding for late-stage start-ups is the main cause of the current state of the ecosystem, small companies in the pre-seed, seed, or Series A phases are also slow to stabilise, with a 50% decline compared to their peak in 2021.

As for those in Series B or C, their funding has been the highest among all, and projections indicate it will reach $2.4 billion by the end of 2024. These figures place their current situation at pre-pandemic levels, supporting the stabilisation the market is experiencing.

Insurtech Challengers (1.0) are evolving tech market dynamics and the insurance industry’s shifts have helped them recognise core insurance challenges and demonstrate their value. This is reflected in their stock performance, which has shown marked growth over the past two years.

The United States and Europe lead in investment

Analysing the insurtech market by geography, the United States continues to lead in investment, followed by Europe ($1.8 billion and $1.1 billion, respectively). Both regions are showing fairly positive performance, and the trend indicates they will continue this way.

Emerging markets like Latin America are struggling more to attract investors, remaining at historical lows with $37.1 million in funding. However, the insurance penetration gap is gradually narrowing on the continent, so growth prospects remain optimistic. Also, there’re internal rounds that aren’t public, and investors are starting to look closer on the region, with positive perspective for the near future.

B2B SaaS start-ups capture 43% of funding

Companies within the insurtech ecosystem focused on Software as a Service (SaaS) with a B2B (Business to Business) business model have secured 43% of total funding, the highest rate in history.

This group of start-ups includes providers of software, pricing, risk management, underwriting, administration technology, and reinsurance technology, among others. Additionally, many of them base their offerings on artificial intelligence (AI) products or are expanding their portfolios with new AI-focused solutions.