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Insurance Startups 2017

5 Fintech Startups To Watch In 2017

After a glum 2016, look for startups tackling massive opportunities like insurance and real estate to reenergize the fintech sector.

For fintech, 2016 was a year of reckoning. Scandals and layoffs killed industry buzz, and deal activity took a mid-year nosedive. Regulatory uncertainty in the U.S. loomed large, as did Brexit. For some companies, the environment led to a greater reliance on partnerships with big banks, with potential implications for the types of exits that investors could realize. For others, 2016 became a time to retrench and refocus.

Those efforts should start to pay off in 2017. Here, we highlight five U.S.-based fintech startups with growing traction that exemplify broader industry trends.

After flying under the radar for its first four years of operations, San Francisco-based Metromile dropped a bombshell in September: It had quietly raised nearly $200 million in a series of unannounced investment rounds, while at the same time positioning itself to grow nationwide as an independent auto insurer. Pay-per-mile auto insurance, the company’s core offering, is now poised to go mainstream.

For low-mileage drivers, Metromile’s typical fees—$35 per month, plus 5¢ per mile—can lead to significant savings. For higher-mileage drivers, the company is experimenting with partnerships. For example, it has teamed up with Uber to offer a specialized plan that encompasses personal and commercial coverage.

Insurance investors say Metromile has become an important proof point for the industry’s hottest topic: Measuring observable behavior in order to get more granular about risk. “It’s all about data and creating a customized risk profile for yourself,” says Nabil Meralli, partner at InsurTech Venture Partners, a new London-based fund.

Watch out for Metromile, and “insurtech” more generally, in the year ahead.

Real estate technology moved into the spotlight in 2016, with blockbuster rounds going to Compass ($75 million) and OpenDoor ($210 million). In parallel, crowdfunding real estate platforms have been proving their mettle—bootstrapped Sharestates, for example, recently passed $230 million in funded projects.

Cadre, as its name implies, is less interested in crowdfunding and more interested in capturing the large pools of capital required to fund major commercial deals. Cadre CEO Ryan Williams is just 28 (and a Harvard-educated serial entrepreneur), but he has the ear of some of finance and real estate’s top power brokers and a growing team of star players operating out of the startup’s headquarters, a loft-style office in Soho. (The digs come courtesy of Cadre investors Josh and Jared Kushner; family firm Kushner Properties owns Soho’s Puck Building, where it has installed Cadre and fellow Thrive Capital portfolio company Oscar Health.) Real estate heavyweight Mike Fascitelli is on Cadre’s investment committee, and Andrew Borovsky, a veteran of Square and Apple, runs product.

“To date, our investors on the platform have been family offices, high net worth [individuals], pensions, endowments,” Williams says. “We think we can build a strong brand and sense of loyalty, almost social proof, at the top of the investing pyramid.”

So far, the company has closed on more than $500 million in inventory.

Betterment, RobinHood, Wealthfront, Wise Banyan: There is no shortage of options today for managing your investments via smartphone. Even established players like Charles Schwab are upping their game with improved mobile apps. Yet this past year New York-based Stash managed to cut through the noise in this crowded market and win more than 300,000 users.

The company’s growth “has been the fastest that we’ve seen,” says Andrew McCormack, founding partner at Valar Ventures, which led the $25 million Series B that Stash announced in mid-December. “They have been growing at an incredible rate with a very low cost of acquisition because there’s such viral engagement.” Stash is proof positive that the old-fashioned email newsletter can still pack a marketing punch.

Whether the company’s high engagement leads to equivalent growth in assets under management remains to be seen. Stash’s strength lies in its “start small, think big” ethos; users can invest as little as $5, allocated according to their beliefs and values. The catchy, curated portfolio options include “Roll With Buffett” and “Social Media Mania.” At the end of the day, Stash is Blackrock ETFs, rebranded for nest egg newbies. But there might just be a business in that.

Is Venmo ripe for disruption, too? That is the thinking behind Tilt, which bills itself as a “social network built around money” and claims to be the fastest-growing app on college campuses. From Friday night pizza with roommates to a sorority-sponsored fundraiser, Tilt brings the functionality of peer-to-peer payments, crowdfunding, and Eventbrite under one roof.

“It’s the easiest way to collect, fundraise, and sell with your community,” says cofounder and CEO James Beshara. So far, he and his team have raised over $62 million in venture capital. “We don’t do any curation. We don’t have any featured list. The only thing that’s a push to you is through social relations with the people you care about.”

Tilt charges a fee for commerce—selling merchandise or tickets, for example. But other transactions are free. When rival Venmo adds the functionality to support merchants, the two mobile platforms will be going head-to-head as they compete for the influential 18-24 demographic.

Cross River Bank

Cross River Bank made headlines (and induced some head scratching) when it announced $28 million in venture capital funding last fall. What did Silicon Valley see in the Fort Lee, New Jersey-based community bank? As it turns out, fintech’s self-proclaimed disruptors need access to the banking system’s old-fashioned infrastructure in order to move and deposit money, originate loans, and more. And Cross River, seeing a market opportunity, had carved out a valuable niche serving companies like Affirm, Google Wallet, and Rocket Loans.

But fintech regulations are due for big changes in 2017, and Cross River may find itself at a sudden disadvantage. The Office of the Comptroller of the Currency (OCC), the nation’s top bank regulator, announced plans for a new type of license on December 2. Under the special charter, fintech startups would be able to grow more quickly nationwide by sidestepping the arduous process of navigating state licenses and rules. They would also subject themselves to greater scrutiny on the part of the OCC with regard to consumer protections, capital controls, and more.

Cross River CEO Gilles Gade maintains that there are opportunities for the bank to continue to serve its startup customers, even under the new regulatory regime, by teaching them about compliance. But it’s unclear whether that strategy will deliver the kinds of returns that VCs like Andreessen Horowitz expect.

Insurance Startups 2017

The land of traditional insurance is getting an upgrade.

2017 might be the year the insurance industry (which tends to conjure up images of cramped cubicles, multiplying paperwork, and incomprehensible legalese) gets the fintech touch; in fact, we’ve already seen the beginnings of the change with certain startups named after certain citrus beverages.

Want to know who else is changing the insurance game? Take a look at Bank Innovation’s list of five below:

This California-based company combines two of the features consumers love the most—mobile, and on-demand services—into one insurance platform. The startup covers its users against all of the usual things—accidental damage, theft, loss—with triple the usual speed, processing your claim via a smartphone in minutes, rather than in weeks. Trov, which just closed a $45 million round of funding (bringing its total worth up to approximately $90 million) is currently available for users in the United Kingdom and Australia, but will be making its U.S. debut later this year.

Launched in Brooklyn, New York, this startup wants to dilute the process of life insurance down to a few taps on a screen. Fabric, which raised its seed round of $2.5 million last month, allows users to purchase their life insurance policies quickly, digitally, and directly. Currently, Fabric provides its services through Vantis Life, but give it time. The company does not have its own app, but has built out a browser-based application for digital devices, including desktop, mobile, and tablet.

Like certain others in the insurance game, Fabric aims to ease some of the cost concerns, by offering its Fabric Instant service, which allows users to pay $6 per month for accidental death coverage of $100,000.

As a consumer, figuring out if you’re signing up for the right kind of insurance is exhausting, and is exactly the problem Brolly, an insurtech based in London, wants to fix.

The company, which launched last year (after raising a $13 million round of seed funding in Sept. 2016), uses AI technology to help users find out if they’re over-covered, under-covered, missing covers, or even if they can get a more convenient price for the coverage they want.

The startup, as the U.K.’s “first AI insurance advisory app,” allows users to keep track of their insurance price and documents within the app (a system which has got to be easier than keeping that collection of useless documents piled in some red folders).

This Berlin-based startup wants to tackle the snarls of insurance for businesses, and is specializing in product insurances. The company, which raised a $20 million round of venture funding in March, helps e-commerce providers cross-sell their product insurances within their digital checkout processes to boost online profits.

More than 1,000 online shops rely on Simplesurance solutions right now across the EU (all 28 countries), as well as in the U.S. and Canada.

Ladder, which was launched after sealing a $14 million Series A in October 2016, wants to enable consumers to get a life insurance quote within seconds—dialing down a process that can take weeks. Users apply for insurance coverage online, and receive term insurance coverage instantly after the application. The Palo Alto, Calif.-based company then allows users to personalize their policies, based on individual needs.

Looking at all of the startups above — and other companies, such as Lemonade (which is already on Bank Innovation’s list of best financial apps) — it certainly seems like insurtech is on the rise across the globe.

Grace Noto

Grace Noto is Associate Editor of Bank Innovation. She has an MA from the University of Essex, as well as BA in English and a BA in Journalism from SUNY New Paltz. Prior to joining Bank Innovation in the summer of 2016, she worked on Electronic Products Magazine, an online publication surrounding technology and computer engineering, and has worked for other publications, including the Poughkeepsie Journal. She also writes in her spare time, and really needs more hobbies.

Insurance Startups 2017

The land of traditional insurance is getting an upgrade.

2017 might be the year the insurance industry (which tends to conjure up images of cramped cubicles, multiplying paperwork, and incomprehensible legalese) gets the fintech touch; in fact, we’ve already seen the beginnings of the change with certain startups named after certain citrus beverages.

Want to know who else is changing the insurance game? Take a look at Bank Innovation’s list of five below:

This California-based company combines two of the features consumers love the most—mobile, and on-demand services—into one insurance platform. The startup covers its users against all of the usual things—accidental damage, theft, loss—with triple the usual speed, processing your claim via a smartphone in minutes, rather than in weeks. Trov, which just closed a $45 million round of funding (bringing its total worth up to approximately $90 million) is currently available for users in the United Kingdom and Australia, but will be making its U.S. debut later this year.

Launched in Brooklyn, New York, this startup wants to dilute the process of life insurance down to a few taps on a screen. Fabric, which raised its seed round of $2.5 million last month, allows users to purchase their life insurance policies quickly, digitally, and directly. Currently, Fabric provides its services through Vantis Life, but give it time. The company does not have its own app, but has built out a browser-based application for digital devices, including desktop, mobile, and tablet.

Like certain others in the insurance game, Fabric aims to ease some of the cost concerns, by offering its Fabric Instant service, which allows users to pay $6 per month for accidental death coverage of $100,000.

As a consumer, figuring out if you’re signing up for the right kind of insurance is exhausting, and is exactly the problem Brolly, an insurtech based in London, wants to fix.

The company, which launched last year (after raising a $13 million round of seed funding in Sept. 2016), uses AI technology to help users find out if they’re over-covered, under-covered, missing covers, or even if they can get a more convenient price for the coverage they want.

The startup, as the U.K.’s “first AI insurance advisory app,” allows users to keep track of their insurance price and documents within the app (a system which has got to be easier than keeping that collection of useless documents piled in some red folders).

This Berlin-based startup wants to tackle the snarls of insurance for businesses, and is specializing in product insurances. The company, which raised a $20 million round of venture funding in March, helps e-commerce providers cross-sell their product insurances within their digital checkout processes to boost online profits.

More than 1,000 online shops rely on Simplesurance solutions right now across the EU (all 28 countries), as well as in the U.S. and Canada.

Ladder, which was launched after sealing a $14 million Series A in October 2016, wants to enable consumers to get a life insurance quote within seconds—dialing down a process that can take weeks. Users apply for insurance coverage online, and receive term insurance coverage instantly after the application. The Palo Alto, Calif.-based company then allows users to personalize their policies, based on individual needs.

Looking at all of the startups above — and other companies, such as Lemonade (which is already on Bank Innovation’s list of best financial apps) — it certainly seems like insurtech is on the rise across the globe.

Grace Noto

Grace Noto is Associate Editor of Bank Innovation. She has an MA from the University of Essex, as well as BA in English and a BA in Journalism from SUNY New Paltz. Prior to joining Bank Innovation in the summer of 2016, she worked on Electronic Products Magazine, an online publication surrounding technology and computer engineering, and has worked for other publications, including the Poughkeepsie Journal. She also writes in her spare time, and really needs more hobbies.

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About the InsurTech Directoy:

We know that it is very difficult and time consuming to stay up to date or find the right contact persons or interesting and promesing new insurtech startups in the industry. So we thought, that it is a good idea to launch the insurtech directory in order connect the industry. We will make it easier to find companies to exchange experiences, benchmark or corporate with.

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You can help us to keep this directory up to date. Just let us know if there is an interesting startup, event or accelerator that has not been listed yet.

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Venture Scanner Insurance Technology Startup Highlights — Q4 2017

Venture Scanner recently published a summary report via Medium on the Insurance Technology (insurtech) startup sector for Q4, 2017.

Sector Summary by Venture Scanner:

  • 14 Categories
  • 1438 Venture Deals
  • 19B dollars accumulated funding

The graphic below highlights the innovation quadrant for the insurance technology sector and provides an insight into the average age and funding for the respective categories.

In the summary report, Venture Scanner stated that funding has dropped in comparison to a few years ago, however the past 5 years has seen funding increase once again. In 2014, Ping An raised 4.75 billion dollars in post -IPO equity during Q4. This is reflected on the graphic provided in the report (original link below), where a considerable increase is evident. Elsewhere, 2015 saw relatively large funding periods, mainly during Q2 and Q4. Except for an outlier year, the most recent quarter was however in line with previous totals. In 2017, the funding in Q4 grew by 27% in comparison to the Q4 2016 funding total.

Additionally, Venture Scanner stated that “quarterly insurance technology exits in 2017 were lower than 2016, with Q4 2017 seeing a drop of 73% from Q4 2016”.

Latest Activity

Insurance technology funding events were mostly early stage in Q4, 2017. In Q4, 50 funding events took place, 70% of which were either seed or series A. Most insurtech categories experienced funding in Q4, with insurance technology startups raising 564 million dollars during this quarter.

The top 5 insurtech events accounted for 27% of quarterly funding, according to Venture Scanner. The most notable mentions included Lemonade via funding type series C, amounting to 120 million dollars, as well as BIMA, via funding type series D, with 97 million dollars. Both events took place on 19/12/2017. There were 4 insurance technology exits during Q4, all of which were acquisitions. In particular, the report highlighted Guidewire’s acquisition of CYENCE for an amount totalling 275 million dollars.

Category Discovery — Insurance Data

According to Venture Scanner, every quarter a new category will receive a ‘deep dive’, providing comparisons to other categories and discussing trends. In Q4, the insurance data category experienced modest growth, with the category accounting for 9% of funding in the sector. The summary report also emphasises the value of the insurance data category, describing it’s position as one of the leading categories within the insurtech sector. The graphic below illustrates the previous total, quarterly funding and percentage growth in each sector.

This section proceeds to discuss insurance data funding, drawing attention to the companies within insurance data that are funded like the ‘typical’ insurtech company. “Insurance data has a median funding exactly at the average of other categories, and a first quartile that is 4 million dollars higher”, as reported by Venture Scanner.

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