how much difference a year done.
In April 2021, TechCrunch published a venture capitalist’s view that “the era of European insurtech IPOs is soon upon us.” At the time, perspective made sense.
After all, last June this column explored rapid fundraising in the insurance tech startup market, stating that “insurtech is hot on both sides of the Atlantic.” At the time, WeFox had recently raised a $650 million funding round, putting big points on the board for the European insurtech.
Since then, we’ve seen the tech market correct and public market investors spit out the insurtech IPOs of late 2020 and early 2021, essentially revaluing the value of neo-insurance companies to near zero if we deduct the cash of their market capitalizations.
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The shift in sentiment led The Exchange to ask in February which insurtech startups could thrive this year and which could suffer. Since then, tech stocks, including the most recent insurtech IPOs, have continued to correct, bleeding value on the Nasdaq and NYSE.
Now, about a year ago, when it looked like a period of hyperactivity was going to send a slew of European insurtechs into the public markets, we take a look at just how different the market is. With venture capital data collected for TechCrunch by PitchBook and notes from an active insurtech venture capitalist Florian Graillot from Astorya.vc, we now know much more.
While the 2022 data tells a grim story, the rest of the second quarter could prove crucial for insurtech this year. Let’s explore insurtech activity in North America and Europe, compare recent results, and see what might come our way.
How insurtech investing has changed this year
The optimism around insurtech results last year aligns perfectly with the data we can now see in hindsight.
In North America, PitchBook reports that insurtech venture capital activity grew to $2.21 billion over 83 rounds in the second quarter, from $1.67 billion over 78 rounds in the first quarter of 2021. It peaked in Q3 2021 with $2.51 billion invested in 66 deals, before dropping to $1.80 billion. in the fourth quarter of 2021 and $1.52 billion in the first quarter of 2022.
The number of transactions also fell to just 54 in the first quarter of 2022, from 67 in the fourth quarter of 2021.
Insurtech’s story in Europe has been a bit different. Investment was largely flat from the first quarter of 2021 to the first quarter of 2022, according to the PitchBook, with one exception: the second quarter of last year.
Excluding the second quarter of 2021, European insurance technology investments mostly hovered between $450 million and $550 million from the beginning of last year to the first quarter of 2022. In the second quarter of 2021, however, some 1, $76 billion was invested across 57 rounds, establishing both a deal and a dollar. peak for the recent past. (Briefly on why the second quarter of 2021 is key to understanding the future of insurtech in Europe.)