Venture Capital +Insurtechs 2023 edition

 As a global venture capitalist and catalyst for change, I have never been a fan of conventional thinking.  After finding my little place in this world (venture, entrepreneurship, innovation and global expansion), I spent the last decade learning about new technologies, figuring out how to explain it to global leaders, investing in them, and supporting the entrepreneurs that are building it.

 

From digital health, gaming, AI, infrastructure to security, each of the different verticals bring a different set of friends and communities. Joining my latest firm I was tasked with making early stage investments and supporting innovation for a large Japanese conglomerate with a global presence. Thus, the latest journey brought me into world of insurance and insurtech, served with a side of complexities of Japanese culture,  proved to be much more exciting then I could have ever anticipated. I quickly discovered that the worlds of venture capital and insurance were greatly conflicted, with opposing viewpoints on risk, regulations, and returns.

 

Venture investments are typically high-risk, high-reward, and investors are looking for companies with the potential to generate significant returns on their investment while insurance companies were more conservative, risk-averse, and heavily regulated.

 

The recent economic downturn has certainly had an impact on the insurtech industry, with many investors pulling out and abandoning the category altogether. However, despite the setbacks, I am still hopeful but we do need to RAISE THE BAR.

 

In order to raise venture capital dollars, insurtech startups need to demonstrate that they can compete with high growth SaaS companies and prove that they have the potential to become multi billion dollar companies. This has been one of the biggest problems I have seen in the insurtech world. There are many great insurance startups especially MGAs that are great as a small stand alone business but it is not very interesting from a venture perspective.

 

 

I do want to acknowledge that in the short amount of time, we have come a long way but we still have so much more to go.

 

Everyone is trying to collect data and embed.  This playbook is not unique, but how well can you execute? How quickly can you close customers and turn on high growth profit because you are solving a massive pain point? 

 What I have seen worked well lately is verticalized fintech with embedded insurance rather than a pure insurance play. This enables a company to have multiple revenue streams making it a much more powerful company.

 

So the message to my fellow insurtech peers, let`s raise the bar. Embedded alone is not enough. We need to build more resilience solutions where insurance is one component of something bigger, much bigger.