Can insurtech recover from ‘death of insurtech 1.0’?

A lot of the startup sector came out of the 2021 hype with a massive hangover in the form of valuations they couldn’t justify as the market went down and down. Startup Insurtech suffered the worst, as investors began to question the viability of the entire category.

A latest report in this sector by Dealroom, Mundi Ventures, MAPFRE, NN Group and Generali called this disappointment “the death of Insurtech 1.0.”

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The meltdown begins in 2022, when “a broad market downturn, coupled with clear specific challenges from leading insurtechs[s] to achieve profitability,” contributing to creating a challenging new environment for insurtech funding, the report said.

This challenging environment is also reflected in this year’s data: public insurers are struggling and there has been a sharp decline in venture capital flows into the sector.

But money is like water when it comes to venture capital. Despite all the bad news, capital is still pouring into pockets of insurtechs that are seen as quite different from the first wave companies.

This morning, let’s dig into what’s happening to global insurance startups, and see if we can find some light in the murky quagmire that keeps so many insurers astray.

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