In case you haven't noticed, Silicon Valley venture capitalists are turning to the trillion dollar insurance industry to disrupt services and get a slice of the market.
Last year, venture capitalists poured $2.65 billion into insurance startups globally, according to research firm CBInsights.
Insurance is seen as a "highly antiquated, regulated, and entrenched industry, which make it both appealing and problematic for startups," according to the digital news outlet Quartz. Entrepreneurs and venture capitalists see several problems in the insurance world that make it ripe for a shakeup:
- Insurance is a massive market.
- The insurance business model is broken because it focuses on eliminating risk, not helping customers when they need it.
- The insurance industry remains untouched. At its core, insurance today is similar to how it was 50 years ago.
- Insurance carriers generally provide a terrible user experience.
In December 2015, Lemonade, a peer-to-peer insurance company, raised $13 million in seed funding from Sequoia Capital — the firm’s biggest seed funding round ever. Insurance comparison site PolicyGenius secured $15 million in funding in January in a Series B round, bringing its total funding to $21 million.
Next Insurance — an insurance startup trying to personalize and automate insurance for small businesses — announced it raised $13 million on March 15. And sources say insurance startup Slice Labs raised a seed round last month of around $3-$4 million.
For the full story, see "The highly regulated, expensive area of finance Silicon Valley is now eager to disrupt."
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