Insurtech unicorn Next Insurance is beefing up its small business offerings with the purchase of digital insurance agency AP Intego — only the second acquisition in the company’s five-year history.
Palo Alto, California-based Next Insurance said March 3 that it agreed to buy Waltham, Massachusetts-based AP Intego for an undisclosed amount. Sofya Pogreb, chief operating officer of Next Insurance, said the deal will double the size of its business. The acquirer plans to absorb 160 AP Intego employees around the U.S., bringing its headcount to nearly 600.
Using a pay-as-you-go model, AP Intego sells property and casualty insurance to small businesses through a network of partners, including Intuit, Gusto, Square and Toast. AP Intego’s insurance lines include workers’ compensation, general liability, commercial property, cyber-liability and E&O. It works with more than a dozen insurance providers.
“Next Insurance will now offer its products on AP Intego’s platform alongside an established stable of carrier relationships, providing small businesses with more choices,” Pogreb said. “AP Intego’s experience in insurance product distribution through partners and pay-as-you-go infrastructure, combined with our approach to digital customized coverage, will provide customers with seamless access to innovative digital insurance products.”
Pogreb said the AP Intego deal puts the insurance unicorn a step closer to achieving its goal of becoming a one-stop shop for small business insurance.
No other acquisitions are on the horizon, but “we’re always considering our options,” Pogreb said.
Next raised $250 million in a Series D funding round announced in September. The round — led by CapitalG, the investment arm of Google’s parent company, Alphabet — valued the company at more than $2 billion. Since being founded in 2016, the insurtech has amassed $631 million in venture capital.
In December, three months after revealing the $250 million round, Next Insurance made its first-ever acquisition: Denver-based Juniper Labs, a provider of automated underwriting for sellers of small business insurance. The value of the acquisition was undisclosed.
“At Next Insurance, we’re modernizing a centuries-old industry to better provide small business owners with convenience, value and choice,” Guy Goldstein, co-founder and CEO, said in a March 3 news release.
Next Insurance’s acquisition of Juniper Labs and pending purchase of AP Intego are part of a continuing wave of insurtech M&A. In December, professional services firm PwC noted that insurtech M&A activity should continue to escalate “as competition forces insurance companies to adapt to the technological landscape and differentiate their product offerings to meet consumer demands.”
Last year, according to an estimate from M&A advisory firm Hampleton Partners, at least 95 insurtech M&A deals happened around the world.
“Revenue in the insurtech market is expected to reach $10.1 billion by 2025. There is no doubt that the M&A, fundraising and partnership activity unfolding at present will continue to thrive as players compete for a piece of this pie in an increasingly digital world,” Miro Parizek, principal partner at Hampleton, said in a news release.