[Market] The hottest insurtech deals in Europe — 2020 Half Year Review
Investing in seed InsurTech startups, scouting startups through its automated sourcing tool, and being involved in many local InsurTech scenes across Europe — astorya.vc is happy to share a detailed overview of what Insurtech deals from the first half of 2020. You’ll learn more about how much was invested, how many deals were done, who raised the biggest amount, how money was split across countries, which part of the insurance value chain was mainly targeted, etc. You can find our 2019 report here.
🤔 To put in a perspective:
- €6B/ year is the IT budget of BNP Paribas (link)
- €1B is the fund size of Allianz X (link)
- ~€500m is the size of N26 series D (link)
- ~€280m is the amount raised by Lemonade in its IPO (link)
A FEW KPIs
- €360m+ was invested in European InsurTech startups in H1 2020 (vs €800m in full 2019). The amount is less than 50% of the full year 2019. But then, we had no Covid-10 impact in Europe and more mega-rounds (>€50m) which kill the stats, occurred.
- 39 deals closed in H1 2020 (vs 55 in full 2019)
- €3m median round size (vs €3.5m in 2019)
SPLIT OF INSURTECH DEALS
The split is very similar to last year:
🤑 Bought by Many, (~€90m round) took 25% of all H1 2020 funding. Same ratio as Wefox in 2019.
💰 4 deals (Bought by Many, Alan, xbaV and Tractable) took 50% of the money in H1 2020. But what’s more interesting is that the deal #3 and #4 would be the #9 biggest deals from 2019 overview. The big rounds of 2020 are still small compared to the big rounds of 2019.
💰 80% of the money went to 28% of the deals. 2019 was closer to the Pareto Distribution (80/20), but as the stats in H2 will grow, so should the distribution.
SPLIT OF DEALS BY GEOGRAPHY
This geographical split is very unusual.
Despite the Covid-19 slowdown, UK 🇬🇧 Insurtech investments are booming
- 📈 Up-to-date in 2020 UK 🇬🇧 Insurtech startups raised 50%+ more than in the entire 2019❗
- 8 out of 11 top deals this year were done in the UK.
At the same time, France 🇫🇷 and Germany 🇩🇪 (respectively 2nd and 3rd biggest insurance markets in Europe) lag not only behind the UK but also largely behind their results from 2019.
- 📉 Germany 🇩🇪 hasn’t reached even 10% of the total 2019 investments. Only after we subtract Wefox, Ottonova and Friday mega-rounds, the ecosystem looks on its way to reach 2019 numbers.
- 📉 whereas in France 🇫🇷 91% of H1 2020 investments was raised by a single company - Alan, leaving only €5m to other startups…
Insurtech scene in other European 🇪🇺 countries is getting more mature. It’s visible in number-of-rounds-to-date. The raised amounts haven’t increased.
SPLIT OF DEALS BY POSITION IN INSURANCE VALUE CHAIN (BY # OF DEALS)
Here is where the magic happened this year. Since years Insurtech space was dominated by startups focusing on the distribution of insurance.
- in 2019, 75% of deals were done in distribution-focused startups, down to 49% in 2020
- 🤩 from 15% to 50% increased the number of startups addressing price & product or claim part of the value chain, from 2019 to H1 2020.
🤔 One explanation could be an (unproven) correlation between the increased deals in the UK and in the above categories, which today require math or data science skills. The UK is a home to 14.000 qualified actuaries*, compared to 4.800 in Germany, 3.000 in France and… 313 in Poland. The probability of launching a startup, which:
- e.g. creates risk models in (specialized) risk categories, like Concirrus (marine), Tinubu Square (business credit), Envelop Risk (cyber)
- e.g. applies data science into insurance processes, like Tractable (AI for damage assessment), Akur8 (data models for actuaries)
…is just higher in the UK.
*Source: Google Search > “how many qualified actuaries in (country)”
SPLIT OF DEALS BY MATURITY (# OF DEALS)
🌱 Too little money is being invested in the pre-seed and seed maturity levels of Insurtech. Only 2 deals <€1m vs 18 deals €1–3m. Majority of invested money comes from more established Fintech funds, which have no time to look at small deals.
🤔 Entry barriers for Insurtech startups are high…
- 12 -18 months sales cycles to corporates for enterprise software startups
- 3 - 9 months kick-off insurance product with an insurer (La Parisienne Assurance best practices)
- 9+ months and €13m to obtain insurance license (Alan’s record) for full-stack Insurtechs
Takeaway: We need to make insurance great again! MORE SEED 🌱 investments necessary!
Want more insights on the insurance technology market?
Co-founded by Florian Graillot and Jan Kastory, astorya.vc invests in tech startups to build the next insurance generation.
Leveraging its own sourcing technology astorya.vc identified 3000+ promising startups, structures their growth through its extended network of mentors, and develops new business opportunities with its insurance investors.
Raised from insurance players, astorya.vc is the first early-stage investor in Europe, focused only on the insurance industry.
Learn more on http://www.astorya.vc
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