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SMB insurance company Next raises $265 million

Nov 1, 2023
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Illustration: Sarah Grillo/Axios

Last valued at $4 billion, Next Insurance raised $265 million in funding from Allstate and Allianz X, it said Wednesday.

Why it matters: Insurtech was the most-funded sector within fintech in the third quarter, per FT Partners data. Strategic investors are helping play a role in that.

Driving the news: Next offers insurance to small businesses including auto services, beauty shops and construction firms. It does the underwriting and takes on balance sheet risk.

  • As part of the deal, Next can sell to Allstate customers and develop new commercial auto products along with the insurance giant.
  • Allianz, meanwhile, has expanded its agreement to reinsure Next's policies, says chief strategy officer Eran Liron.
  • Next is not yet profitable.

What they're (not) saying: Valuation. Liron would not say whether the new funding came at a higher valuation than the company's last peak. Calcalist, however, reports that it's at the same price as its 2021 round.

  • It raised $250 million then at a $4 billion valuation. FinTLV Ventures and Battery Ventures served as lead investors.

Context: Insurtech's third-quarter funding rose 131% from the same period a year earlier, pulling in $2.7 billion, per FT Partners data.

  • Leading that was a group of investors including Nomura, Prudential and Warburg Pincus, who committed $1 billion to Prismic Life Reinsurance. The deal in theory gives the investors stable, longer-lasting returns.
  • Openly, which offers tech to insurance agents, also raised $100 million during the quarter.
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