Insurtech startup Next Insurance has raised another $250 million in funding, pushing its valuation over the $2 billion mark.
CapitalG, Alphabet’s investment arm, led the Series D round. As a result, CapitalG partner Sumiran Das will join the Next Insurance board. Existing investor Munich RE Group, a German insurance giant, and new investor FinTLV Ventures, an Israeli fintech VC, also contributed to the round. Previous investors include American Express Ventures and Nationwide Ventures.
“Next Insurance is modernizing insurance for small business owners — making it fast and simple to get broad, customized coverage,” Das said in a September 23 news release announcing the $250 million round. “We believe that there is an opportunity to use technology to transform the small business insurance experience in the U.S. and build a national insurance leader.”
CapitalG is no stranger to fintech funding. Its portfolio includes Credit Karma, Oscar, Robinhood and Stripe.
Since its founding in 2016, Palo Alto, California-based Next Insurance has raised $631 million in venture capital. Almost a year ago, the startup announced a $250 million Series C round led by Munich Re, lifting Next Insurance’s valuation to $1 billion.
From a funding standpoint, insurtech startups like Next Insurance are garnering lots of attention. In the second quarter of this year, insurtech companies raised nearly $1.6 billion around the world, according to CB Insights, which operates a market intelligence platform. Research and consulting giant Forrester puts the second-quarter haul at $1.2 billion.
Regardless of the precise amount, Forrester noted that despite the coronavirus pandemic wreaking havoc on the global economy, the second-quarter funding total “suggests that investors continue to see opportunities” in the insurtech sector. Insurtech funding waned in the first quarter, at the outset of the pandemic, but bounced back in the second quarter, Forrester said.
Next Insurance operates a fully online platform that provides “simple, affordable and tailored insurance products” to small businesses and self-employed professionals. The startup’s offerings include general liability, professional liability, commercial auto and workers’ compensation policies. Next Insurance says it has served more than 100,000 customers.
“Insurance is a market primed for a new approach — one that believes it is a social good and cares for its customers,” said Guy Goldstein, co-founder and CEO of Next Insurance.
The startup boasts that it has notched a 133% year-over-year increase in gross written premiums (GWP) and recently hit $750,000 in GWP in a single day. As explained by the International Risk Management Institute, GWP represents the amount of premiums written by an insurer before subtracting reinsurance and commissions.
On the heels of growing its workforce this year by 50%, Next Insurance plans to add more than 200 employees over the next 12 to 18 months in Palo Alto, Austin and Israel.