Allstate, Allianz invest $265 million in insurtech startup Next Insurance
Next Insurance, an insurtech startup that provides coverage for small businesses and entrepreneurs, has secured $265 million in funding led by insurance giants Allstate and Allianz. The investment makes it the biggest funding deal in the company’s history and the largest insuretech equity round of 2023, according to PitchBook.
This recent financial backing also surpasses Next Insurance’s previous funding round of $250 million Series E financing, backed by FinTLV Ventures, Battery Ventures, CapitalG, Group 11, Zeev Ventures, Founders Circle, and G Squared, valuing the company at $1 billion.
The startup has been on an upward trajectory since launch raising more than $1 billion in funding to date. Currently, Next serves over half a million customers and is approaching $1 billion in premium revenue.
Next Insurance co-founder and CEO Guy Goldstein said that the partnership with two major global insurers is crucial not only due to the substantial capital investment but also for its strategic goals aimed at digital business transformation, CNBC reported.
In collaboration with Allstate, Next Insurance intends to venture into the development of commercial auto insurance products, a market that currently relies heavily on manual processes within the U.S.
“Whether a pickup truck or fleet of cars for pizza delivery, today in the U.S. you can’t go online and buy it like a personal line of auto,” Goldstein said.
Goldstein also highlighted the enormous potential within the market of over 30 million small business owners in the U.S. He pointed out the increasing trend among a younger generation of entrepreneurs operating for less than 15 years, who seek seamless digital processes for accessing insurance services.
“There’s a massive opportunity with 30 million-plus small business owners in the U.S.,” said Guy Goldstein, CEO and co-founder of Next Insurance
Founded in 2016 by Israeli entrepreneurs Guy Goldstein, Nissim Tapiro, and Alon Huri, Next Insurance offers online-based insurance solutions tailored for entrepreneurs and small businesses. Their services emphasize swift claims investigation, often resolved within 48 hours, providing transparency and efficiency to their clients. Previously, Next operated its own commercial auto business but made the decision to shut it down due to financial considerations.
Next Insurance covers various sectors including general liability, professional liability, commercial auto, and, more recently, workers’ compensation. Their policies are designed to be easily comprehensible and accessible through instant, round-the-clock online services. The company employs an 85-person team in Israel, with an additional 200-person team based in the U.S.
Historically, the small business insurance market has been underserved, primarily dominated by large insurers focusing on big commercial clients or individual consumers. The lack of tailored policies for small businesses, coupled with a traditional customer experience that necessitates digital transformation, has left small business owners seeking general liability, professional liability, workers’ compensation, and other essential coverages feeling overlooked.
Unlike the personal auto and home insurance sectors, where the digital shift has largely moved policy sales and claims processing online, the commercial insurance industry remains divided and, in many instances, continues to rely on traditional manual procedures.