Next Insurance, the Israeli digital insurance startup that helps small businesses get cover, has raised a significant new funding round, adding another $83 million to its balance sheet.
The Series B round is led by Silicon Valley’s Redpoint Ventures, and will be used by the company to continue expanding across the U.S., where it now operates as a full service insurance carrier. It will also increase headcount in both its Israel and U.S. offices.
Founded in 2016 with the aim of becoming a one-stop insurance shop for micro and small business insurance needs, Next Insurance designs insurance plans for business sectors that are often overlooked by more general insurers.
Small business owners often rely on price comparison websites to figure out what kind of coverage they need and where to buy it, though that means the plans they get don’t always cover all their needs. The other option is to use a broker but that also adds another middle person.
“The complexity of the small business insurance market is very significant and this leads to a situation where even the largest insurance providers own less than 10 percent of the small business market,” founder and CEO Guy Goldstein told TechCrunch when the company raised its Series A. “This offers us huge growth potential as we aim to specialize in and become a market leader in each small business vertical”.
The small business sectors where Next Insurance offers general and professional liability insurance currently includes contractors, fitness, cleaning, beauty, therapy, entertainment, and education. It lets you buy insurance instantly at what it claims is very competitive prices and with no hidden fees. In addition, now that Next Insurance is a licensed carrier, it is able to write policies independently, with what it says is more freedom over underwriting, setting prices, and configuring policies.
Moving forward, the company plans on adding further lines of insurance, on-demand coverage, and ensuring that claims are paid within 48 hours. It is also hoping to develop more sophisticated uses of AI and machine learning to improve the customer experience and streamline the insurance purchasing process.
To that end, Goldstein says Next Insurance’s Series B is a “monumental turning point” in the company’s history, describing growth over the last two years as exponential. Hyperbole aside, the company does appear to have found market fit, as evidenced by the size of the round and how many previous backers followed on.
The Series B Round brings Next Insurance’s total funding to $131 Million in just two years. Other investors that participated in this round include Nationwide Insurance, Munich Re, American Express Ventures, Ribbit Capital, TLV Ventures, and Zeev Ventures. Elliot Geidt, Managing Director of Redpoint Ventures, will join the board of Next Insurance.
More broadly, the insurtech space is rapidly heating up in recognition that the insurance sector, both consumer and B2B, is still yet to be fully digitised, especially in a mobile-first world. In the U.S., consumer home insurance app Lemonade has been grabbing most of the headlines, not least after it raised $120 million in a round led by Softbank.
“Gone are the days of complicated, unreadable policies, exclusions that leave entrepreneurs vulnerable, and endless meetings and phone calls with insurance agents who don’t understand the nuances and needs of different classes of business,” adds Goldstein in a statement. “Small businesses are the backbone of the U.S. economy, and they deserve insurance policies that are simple to access, affordable to own, and which provide them the support and confidence they need to thrive”.