A survey of Y Combinator companies makes it clear that the fintech sub-sector is far from dead
Show recently series of related headlines insurtech companies have created, you would be forgiven for predicting that the startup category would be in serious trouble. Not a bit about that.
As The Exchange recently discovered, strong insurtech fundraising in 2021 despite a number of notable public market misfires from the field during the year. After a Strong fundraising periodA number of US-based insurtech startups went public in 2020 and 2021. After some strong initial deals, the cohort has since been decimated by a drop in valuations. .
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In the midst of chaos, we predicted that startups building insurance products will dry up somewhat, while emerging technology companies targeting the global insurance market will be more active. Not yet. The latest Y Combinator cohort showcases a number of insurance-focused tech companies, and some of them want to actually write policies.
Of course, not all. Our hunch about where insurtech startups are working on the mechanics of the current insurance industry is going well. We were too pessimistic about the rest of the insurtech portfolio.
Can’t stop, won’t stop
The fact that the insurtech startup category hasn’t died yet is not surprising at this point. With 2021’s surprisingly strong data, there’s reason to believe 2022 could bring much of the same. Use one Crunchbase Query Originally compiled by its News teamUpdated to limit it to Q1 2021 and Q1 2022 data only, here’s the ground for insurtech startups in terms of capital:
- Q1 2021: $3.209 billion in fundraising recorded
- Q1 2022: $2.796 billion in fundraising recorded
If you’re looking at double figures and wondering why we don’t scream about a drop of about $400 million on an annual basis, let us help. Venture capital data collected by groups like Crunchbase, PitchBook, and CB Insights has to deal with the speed and depth of private market disclosures, which are different from those of public companies. They are slower and less complete. So we expect the Q1 2022 numbers to “fill up” some as time goes on, bringing it closer to the previous year’s numbers.
More important than any swing in dollar amounts is the simple fact that insurtech fundraising can Not fall. Indeed, it is still running. We think it’s good news for startups that are building in the space today. Let’s talk about what they’re focused on.
