Overview
A total of 15 deals were announced during this period, with startups securing a combined funding of €160 million. While the deal volume remains consistent with the same period last year, the investment volume faced a huge decrease of -32% compared to the same period last year. Note that this second quarter of the year is also -11% down from the first one (in money invested) ! This indicates that the current market remains subdued and far below the boom levels seen 2-3 years ago.
The three largest deals
The biggest round was announced by Element, which raised €50 million. If you're familiar with the InsurTech scene, you definitely know this German startup. Launched in 2017, it falls into the category of "full-stack" players, meaning it has its own insurance license. Operating from the start on several property and casualty lines, it now claims 20 different products, covering auto, home, bike, and pet insurance. Initially launched with a direct distribution model, if I recall correctly, it now mainly relies on a B2B2C model and states on its website that it has signed over 70 distribution partnerships. In its communications, it claims the position of Insurer-as-a-Platform.
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Element raised €50 million mainly from Mundi Ventures, which is entering the capital, alongside historical investors including a German pension fund. You may recall that the pension fund entered the capital during the Series B round, announced in mid-2022 for €21 million at the time. The dynamics of this new round are therefore rather positive: more than double the last time, and less than two years later. Especially in the market context that you are familiar with if you regularly follow this podcast - a rather calm market, to sum up. So, this round is significant. It's also the second largest since the beginning of the year! However, a German media outlet, Handelsblatt, indicates that the startup was actually looking to raise €100 million. Twice as much. That said, since its launch, the startup has still raised nearly $180 million!
It's worth noting that on the occasion of this funding round, the startup shared some figures about its activity. In 2023, its premium volume surged by 150% to reach €50 million in premiums. By comparison, it announced a little over €10 million in premiums for the year 2021. Finally, you may recall that the founder of the startup stepped down and was replaced by a new CEO with extensive experience in the insurance sector, notably within the AXA Group. The announcement was made in July 2022.
The second largest deal of the quarter was raised by Pula, a Swiss startup offering parametric insurance solutions, notably targeting farmers. Launched in 2015, the company raises $20 million to further develop its offerings, particularly targeting Africa and Latin America. It claims to cover more than 15 million farmers through its offerings, across 22 different countries, generating a total of $80 million in premiums! The round is led by BlueOrchard, which invests notably in sustainable development issues in emerging countries. The Bill & Melinda Gates Foundation and Hesabu Capital also join alongside historical investors.
Last but not least, Bondaval has announced the third largest round in the European InsurTech scene this quarter. They revealed raising a £15 million round (equivalent to over €17 million). The round is led by Dawn Capital. Founded in 2020, Bondaval specializes in credit insurance with its B2B solution that enables market players to better understand and cover their risks. This funding round will allow the company to continue its development, particularly through the creation of its own reinsurance vehicle, Bondaval RE.
On the commercial side, while the company does not disclose detailed figures, it mentions operating in more than 30 countries. To get an idea of its commercial momentum, it’s worth noting that the amount of this round is roughly the same as its Series A announced 18 months ago, in December 2022. In contrast, its team of 42 people has grown by 40% over the past 12 months!
A more granular analysis of the InsurTech dynamic
Geographically, Germany led in terms of total investment, slightly surpassing the UK. However, the UK remains the most active market based on the number of rounds announced. But once again, it's noteworthy to underscore the substantial activity observed in "the rest of Europe," encompassing regions beyond the primary startup hubs. This ecosystem secured the second position in terms of deal volume. France is lagging behind in terms of momentum, both in deal count and investment volume.
In terms of business lines, the spectrum remained diverse, with activity across every segment once again. And there was a slight increase in activity within the B2B sector compared to the previous quarter, with B2B players accounting for 40% of all deals announced in the second quarter. This is closer to the level of activity measured last year.
Ultimately, the investment landscape across the value chain remained consistent with recent trends. 'Distribution' continued to dominate, though it was slightly below half of all deals announced, and various innovation trends were observed within this sector. 'Underwriting' was active though slightly below its level during the first quarter of the year and the ‘product’ section remained hot with a third of all deal announced in that section, particularly driven by startups addressing emerging risks.
