Key United States InsurTech investment stats in Q3 2024:
- United States InsurTech funding doubled in Q3 YoY
- Deal activity halved in Q3 as investors back fewer but larger deals
- Sedgwick, a global leader in claims management, secured the largest deal for the quarter with a funding round of $1bn
In Q3 2024, the US InsurTech sector experienced significant fluctuations in both deal activity and funding compared to the same quarter last year.
A total of 26 deals were recorded in Q3 2024, representing a 51% decrease from the 53 deals completed in Q3 2023.
Funding, however, saw a dramatic rise, with InsurTech firms raising $1.9bn in Q3 2024—a 2x increase from the $955m raised in Q3 2023.
This surge in funding was heavily influenced by a single $1bn deal involving Sedgwick, a global leader in claims management, loss adjusting, and tech-enabled business solutions.
Excluding this deal, total funding for Q3 2024 would have been $908m, a 5% decrease YoY, illustrating a more restrained investment landscape.
When comparing Q2 to Q3 2024, deal activity rose from 21 to 26 deals, marking a 24% QoQ increase.
Total funding has surged by 8x from $237m in Q2 to $1.9bn in Q3, but this was again due to the Sedgwick deal.
Without this transaction, funding for Q3 2024 would have shown an increase of over 3.5x to $908m.
This suggests that while deal volumes saw a modest recovery, the overall funding environment remains cautious, with fewer high-value investments outside of exceptional cases.
The average deal value in Q3 2024 was approximately $73.4m, a sharp rise from $11.3m in Q2 2024 and the $18.0m average in Q3 2023.
However, excluding the Sedgwick deal, the average deal size drops significantly to $34.9m in Q3 2024, still an improvement over prior quarters but less dramatic.
Projections for 2024 indicate that deal activity would reach 94 deals, a 46% decrease from the 173 deals completed in 2023.
Meanwhile, funding is projected to close at $4.6bn, a 14% increase from $4.0bn in 2023.
Adjusting for the Sedgwick deal, funding for 2024 would be $3.6bn, marking a 10% decline from the previous year.
This adjusted perspective underscores an ongoing focus on smaller, more strategic investments in the sector.
As mentioned, Sedgwick secured the largest InsurTech investment of Q3 2024 with a strategic $1bn equity commitment from Altas Partners.
This investment, part of a transaction valuing Sedgwick at approximately $13.2bn, brings in Altas alongside current major investors such as Carlyle and Stone Point Capital, reinforcing Sedgwick’s growth trajectory.
Known for its innovative claims-handling platform and expansive service offerings, Sedgwick manages millions of claims across casualty, property, marine, and benefits sectors annually.
The partnership with Altas is poised to bolster Sedgwick’s international expansion, technological advancements, and operational resilience, reinforcing its position as a pioneering force in the InsurTech landscape.
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