An Investment Wave
Matthew Wong tracks money. He watches where investors are directing their dollars and where entrepreneurs are focusing their creative efforts. As a research analyst for CB Insights, it is his job to spot startup and venture capital investment trends across geographies and industries. And one trend, he said, is undeniable—insurance technology is hot. “What was a boring industry has become sexy,” Wong said. “Entrepreneurs see an opportunity to reimagine insurance. It’s not an easy industry to get into for startups, between the big incumbents and the regulation, but it’s getting easier now for startups to think about finding new ways to reimagine insurance.” Insurance is a trillion dollar industry in need of a face-lift, and tech companies are lining up to help with that makeover. Five years ago, there were 13 early-stage investment deals involving insurance tech startups, according to CB Insights data. By contrast, 2015 saw 45 deals through October alone. “Over the last year or so we have seen an explosion of startups in the insurance tech industry,” Wong said. “There is definitely a boom going on right now.” The insurance industry is attracting the brightest minds and deepest pockets from Silicon Valley; Cambridge, Massachusetts; New York and London. Vinod Khosla, the technology entrepreneur who founded Sun Microsystems before forming Khosla Ventures, has sunk his firm’s capital into such startups as Zenefits, a payroll and benefits platform for small business, and Oscar, a health insurance company that aims to simplify the purchase process through technology.
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