A diverging insurtech market could injure many companies while others remain unscathed
There were two markets for insurtech startups in 2021: one welcoming and one dismissive. Private market investors poured capital into promising insurtech startups, while the public markets sent the value of recently public insurtech companies down — and then further down as the year progressed.
The decline in the value of public insurtech unicorns was a theme that The Exchange covered throughout last year, noting rising damage as valuations fell from low to lower. And yet when CB Insights dropped its 2021 fintech data collection, it noted that global insurtech venture activity hit a new high in the year. In 2021, insurtech funding reached 566 deals (an all-time record and a 21% gain over 2020) and $15.4 billion in capital (again, an all-time record, and a 90% gain over 2020.)
TechCrunch has discussed the growing gap between public and private tech valuations in recent weeks, as an exuberant venture capital market seemed to move further apart from a late-2021 decline in the value of many technology companies. Much of the losses persisted or worsened in early 2022.
And yet the insurtech market is an even more extreme example of the decoupling we’re seeing more broadly in startup land. How so? Root, which raised a $350 million Series E in 2019 at a valuation of around $3 …