Next Insurance, a provider of digital insurance for small-and-medium sized businesses (SMBs), has raised $250 million in a round that takes its valuation “to slightly above $1 billion,” according to investor Munich Re.
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In a press release issued this morning, Munich Re – a German insurance giant – said it purchased additional shares in the Palo Alto-based startup, increasing its stake in the company to about 27.5 percent.
“Together the companies will tap the business potential of digital insurance solutions for small and medium-sized enterprises in the USA,” said Joachim Wenning, Munich Re’s board chairman. “Next’s data- and technology-driven business model offers outstanding growth opportunities, which we will harness together.”
Next Insurance offers independent business owners a way to get what it describes as “simple, affordable, tailored” insurance. Customers are in a wide range of industries such as consulting, fitness, cleaning, beauty, therapy and entertainment, among others. A Next Insurance spokesperson, Noa Cohen, told me this morning via email that the company has had over 100,000 small businesses as customers over time, combing both past and present customers. It also currently has 200 employees, up from 100 at the end of last year. She also told me that: “Next Insurance ended 2018 with a $44M GWP (gross written premium) run rate and has continued its strong growth in 2019 reaching $77M GWP run rate in August 2019, almost doubling its growth in just 8 months.”
Next Insurance will benefit from Munich Re’s expertise in primary insurance and reinsurance, he added. It also gives the German company the ability to expand its footprint in the U.S. market.
The companies have been partners since 2016. And, Munich Re has also had a stake in the company through its venture arm “for some time,” according to the company.
The round brings Next Insurance’s total raised since its inception in 2016 to $381 million, according to Crunchbase data. In July 2018, the company raised $83 million in a Series B round led by Redpoint Ventures. Other backers include Global Founders Capital, American Express Ventures and Nationwide Insurance.
Next Insurance is just one of a number of startups working to digitize the insurance industry. In August, Ethos raised $60 million in a Series C led by Google Ventures (GV), marking the digital life insurance company’s third round of funding in just over 14 months. Lemonade and Root Insurance have also gained traction from investors looking to influence the user-led future of policy purchases.
Illustration: Li-Anne Dias
Note: This story was updated post-publication to clarify that when the company told us that it had over 100,000 customers, it meant past and present (not current).