US InsurTech Funding Falls by One-Third in 2024 Amid Investor Caution
US InsurTech Funding Falls by One-Third in 2024 Amid Investor Caution
The US InsurTech sector faced a challenging year in 2024, with total funding dropping by 33% year-over-year to $2.8 billion, reflecting a significant downturn from $4.1 billion in 2023 and $6.3 billion in 2020.

Deal activity also declined sharply, with only 98 deals completed in 2024, a 43% drop from 173 deals in 2023 and a staggering 62% decrease from the 261 deals recorded in 2020.

The number of deals exceeding $100 million fell by 38% in 2024, reflecting growing caution among investors. Funding from these larger deals totalled $1.6 billion, down from $2.6 billion in 2023 and $3.7 billion in 2020. Meanwhile, smaller deals under $100 million brought in $1.2 billion, a 25% decline from $1.6 billion in 2023.

Despite this overall decline, the average deal value rose to $28.1 million in 2024, a 33% increase compared to 2023, suggesting a trend toward fewer but more substantial investments in the sector.

One of the standout deals of the year was Cowbell’s $60 million Series C funding round, led by Zurich Insurance Group. Cowbell, a leading provider of cyber insurance for small and medium-sized enterprises (SMEs), plans to use the investment to advance its AI and generative AI-driven digital platform.

The funding will enable Cowbell to enhance transparency in cyber risk management, streamline decision-making for brokers and policyholders, and expand its product offerings and global market presence. The company also aims to strengthen its cyber resilience services and position itself as a leader in the evolving cyber insurance landscape.

The decline in US InsurTech funding reflects broader challenges within the industry, as investors remain cautious amid shifting economic conditions. The reduction in deal volume and funding underscores the headwinds faced by the sector, which continues to adapt to an evolving landscape.

As the industry recalibrates, the focus on high-value, transformative investments may pave the way for a more resilient and innovation-driven future for InsurTech.

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