How Latin American startups and InsurTechs stole the show among the 37 FinTech investments last week
InsurTech companies continued their winning streak last week among the 37 FinTechs that raised big rounds.
Last week, we reported on 37 FinTechs who successfully raised money. Of those, Latin American companies, InsurTech businesses and CyberTech enterprises were the big winners.
Riding high on the ongoing InsurTech boom, Wefox raised a massive $650m that pushed its valuation past the $3bn mark. The new valuation is a big jump from the $1.65bn the Berlin-based company achieved on the back of a $110m Series B extension in December 2019, which added to the $125m previously raised in March that year. Expressing bullishness in the sector, CEO Julian Teicke told Reuters, “Most InsurTechs says that insurance agents are dead. We say: They are more alive than ever.”
Wefox’s Series C raise comes as the InsurTech industry has proven to be one of the frontrunners despite the Covid-19 pandemic. The insurance sector has a reputation for being sluggish to embrace technology and innovate, compared to other sectors in the FinTech industry.
While incumbents are now making some efforts to digitise their operations, the process has accelerated thanks to the coronavirus. With an avalanche of policy claims caused by the health crisis, insurers needed to update their risk models and their systems.
Covid-19 crisis triggered tremendous market growth, opening a slew of opportunities for InsurTech startups, including those selling their own products to consumers or peddling their solutions to insurers eager to innovate.
And investors are there to back them up. Consequently, and despite initial fears that Covid-19 would make it challenging to raise new funds, 2020 proved a breakout year for the sector.
Depending on who you ask, startups in the InsurTech sector secured $1.7bn in total in 2016, according to FinTech Global’s research. By 2020, that figure had jumped to $6.2bn.
The deals overall show that US-based InsurTechs are ahead of their international peers as they secured nearly $2.3bn in Q1 2021, according to FinTech Global’s research. The top ten InsurTech deals in the first three months of the year collectively raised just under $1.2bn, making up 52.2% of the overall investment in the sector during the quarter. The total is much higher than the levels recorded in Q1 2020 when the ten largest transactions raised just over $500m.
Alongside Wefox, a plethora of InsurTechs snagged millions in the last seven days including Expense Check – now Kanopi, Plum, Novidea, Justos, HealthyHealth, Anorak Urban Jungle as well as Bought By Many which raised a massive $350m round – the third largest round raised last week.
Last week also saw cryptocurrency startup focused on stablecoins and public blockchains Circle bag $440m in new funding. Last year, it received a cash injection of $25m from Digital Currency Group, after raising $110m in funding at a nearly $3bn valuation in 2018. Circle’s latest funding also comes as it eyes going public via a special purpose acquisition company or SPAC, at a $4bn.
The latest funding comes amid a huge appetite for crypto companies, led by the market debut of Coinbase which has a $50bn market capitalisation with its stock trading at $237 per share, down from its opening day reference price of $250 per share.
The crypto industry has been on a roller coaster as Tesla CEO Elon Musk’s tweets went from favourable to pulling out from bitcoin completely. In fact, he even went further to say that the digital asset is “not real economy.” He tweeted that “Goods & Services are the real economy, any form of money is simply the accounting thereof.” This had a huge impact on the price of the volatile digital coin which dipped below $36,000.
However, this didn’t stop startups like Circle as well as Unchained Capital and Set Labs rake in big funding rounds last week.
The deals from the previous week also highlight the continuing importance of cybersecurity companies during the coronavirus health crisis. Last week, FinTech Global reported on startups such as Exabeam, idwall, Sentinels, oak9 and [redacted] scoring big funding rounds.
The first half of last year painted a bittersweet picture of the sector as investment into CyberTech ventures cooled down, according to FinTech Global’s research. In total, the ventures in the sector raised $2.2bn between January and June, which is not even half of the $4.7bn injected into the industry in 2019. Moreover, we saw the sector only raise $700m in the second quarter, representing a 60% decline from the first three months of 2020. However, the sector bounced back with increased enthusiasm from investors as CyberTech funding set a new record last year with $6.2bn being pumped in 354 deals – a figure poised to grow this year.
Moving on from the subsectors, where’s the action, you might ask. FinTech investment in Latin America witnessed a strong start to 2021. In the last week, LatAm based companies such as Kushki, Belvo, Justos and idwall hauled in new capital as investors backed innovative startups making financial services more accessible for the large unbanked population in the region. Between 2017 and 2020, total capital invested grew from just $556.1m to over $2.8bn and companies in the region raised over $1.1bn in the first quarter of 2021.
Brazil continues to lead the funding round league in the region, with the three largest deals in the region during the opening quarter coming from that part of the country. Those rounds include Nubank, RecargaPay and Loft.
With that out of the way, let’s take a closer look at the rounds we reported on last week.
Wefox’s $650m Series C, at $3bn valuation
Berlin-based digital insurance company Wefox raised a $650m Series C funding round at a post-money valuation of $3 billion. And this funding round represents the largest Series C to date for an insurance tech company globally.
Wefox plans to invest the proceeds in expanding into the US and Asia within the next couple of years while strengthening its presence in its existing markets in Germany, Austria, Switzerland and Poland. Target Global led the funding round with participation from existing investors including OMERS Ventures, Gsquared, Merian, Horizons Ventures, Eurazeo, Mubadala, Creditease, Salesforce Ventures, among others.
Last year, Wefox reported a profit for its insurance business as its revenue increased to $143m last year, doubling its 2019 revenue.
Circle lands $440m
Global FinTech firm that provides payments and treasury infrastructure for internet businesses Circle raised $440m in financing.
Backers included Fidelity Management and Research Company, Marshall Wace, Willett Advisors, Intersection Fintech Ventures, Atlas Merchant Capital, Digital Currency Group, FTX, Breyer Capital, Valor Capital Group, Pillar VC, as well as Michael J. Price and Friends.
The company intends to use the funds for continued growth, organizational development and market expansion opportunities. The platform has supported more than 100 million transactions by more than 10 million retail customers and more than 1,000 businesses.
Bought By Many collects $350m
UK-based pet insurance provider Bought By Many raised $350m in Series D funding.
The round, which gives the company a pre-money valuation of over $2bn, was led by EQT Growth. The company intends to use the funds to accelerate expansion into new geographies and invest in product innovation. The company offers pet health insurance and preventive wellness services, delivered through subscription-driven technology and a human connection.
Exabeam reels in $200m in Series F
Security analytics and automation company Exabeam raised $200m in Series F funding at a $2.4bn valuation.
The round was led by the Owl Rock division of Blue Owl Capital and supported by existing investors Acrew Capital, Lightspeed Venture Partners and Norwest Venture Partners. The company intends to use the funds to accelerate product innovation. The company offers a cloud-delivered solution that leverages machine learning and automation to help security teams detect external threats, compromised users and malicious adversaries, minimize false positives, and make security success the norm.
Chpiper Cash cashes in $100m
CA-based cross-border payments services company Chipper Cash raised $100m in Series C funding.
The round was led by SVB Capital, with participation from existing backers Deciens Capital, Ribbit Capital, Bezos Expeditions, One Way Ventures, 500 Startups, Tribe Capital and Brue2 Ventures. The company, which has now raised $152m in total funding to date, intends to use the funds to expand operations and its business reach.
Yieldstreet snags $100m
Digital alternative investing platform Yieldstreet raised $100m in a Series C funding round led by Tarsadia Investments.
Kingfisher Investment, Top Tier Capital Partners, Gaingels, Edison Partners, Soros Fund Management, Greenspring Associates, Raine Ventures, Greycroft and Expansion Venture Capital joined the round. YieldStreet gives individuals access to the kind of alternative investments – such as real estate, marine and shipping, legal finance, and commercial loans – normally reserved for institutions.
Kushki collects $86m
Latin American FinTech backed by GED Capital’s Conexo Ventures fund Kushki closed a Series B investment round of $86m, reaching a valuation of approximately $600m, the largest in Latin American history. The round was led by Softbank, and Kaszek Ventures, as well as earlier investors such as DILA Capital and Magma Partners.
Kushki’s clients include large companies around LATAM such as Telefónica, Cabify, Uber, Rappi, OfficeMax, Nubank and SURA. The investment will be directed to fuel an aggressive team expansion with over 200 roles currently open for new software engineer roles. The company will also focus on growing into new markets including Brazil and Central America and consolidating its enterprise capabilities and product offering.
Bench banks $60m
British Columbia-based bookkeeping service for small businesses Bench raised $60m in Series C financing.
The round, which more than doubles total funding to over $100m, was led by Contour Venture Partners, with participation from existing investors Altos Ventures, iNovia Capital, and BMO T&I, and new investors Sage and Shopify. The company intends to use the funds to continue to expand operations and its business reach. Bench offers an integrated offering that includes banking, cards, payroll, full-service bookkeeping, taxes, and advice in a single streamlined software and service offering for small businesses.
Auto financing FinTech MotoRefi scores $45m
MotoRefi, an auto refinancing startup on a mission to help consumers save on their car loans, secured $45m in a Series B investment round led by Goldman Sachs Asset Management.
The latest investment round comes less than six months after MotoRefi raised $10m through its Series A-1 funding round, which was led by Moderne Ventures. The company has raised more than $60m since its inception in 2016.
The firm said in a statement, “Too many people are driving around with a bad deal on their auto loan. What’s more, many people don’t realise it or don’t know what to do about it. Through our partnerships with top local and community lenders, we bring customers great rates and lower monthly payments.”
Truebill lands $45m
Personal finance app provider Truebill raised $45m in Series D funding.
The round, which brought total funding to $85m, was led by Accel with participation from existing backers Bessemer Venture Partners, Cota Capital and Eldridge Industries. The company intends to use the funds to expand its platform of financial management tools.
Truebill is a personal finance app that analyses users’ spending habits, identifies inefficiencies and offers immediate methods to improve their financial health.
Stavvy snags $40m
Boston-based FinTech platform Stavvy secured a $40m Series A funding round led by Morningside Technology Ventures. Part of the funding will be used to fund key team members, including a chief strategy officer.
Stavvy also entered into an alliance with Flagstar Bank, the sixth-largest bank mortgage originator in the country, to provide remote loan modification services.
Launched in late 2019, Stavvy’s “eClosing” technology aims to make the complex legal and financial transactions associated with buying a home easier, safer and more accessible.
Belvo closes $43m round
Latin American open banking platform Belvo raised $43m in a Series A funding round.
The money will be used to accelerate the company’s expansion of its open finance platform in Latin America. The company also plans to double the size of its team, and expand its data enrichment solutions. It will also roll out a bank-to-bank payment initiation offering in Mexico and Brazil.
Among the new investors were Future Positive, the investment vehicle of Fred Blackford and Biz Stone – early investors in Pinterest, Square, Beyond Meat and NotCo; Kibo Ventures – early investors in Flywire, Coverwallet, Clarity.ai and CARTO; and FJ Labs – early investors in Betterment, Checkr and Recargapay.
idwall inks $38m
ID verification and background check company idwall raised $38m in Series C funding.
The funding round was led by Endurance, with participation from GGV Capital, monashees, Canary, Qualcomm Ventures, ONEVC, Peninsula and Norte. The company’s total fundraise comes to nearly $50m to date.
The company plans to spend some of its cash recruiting developers, as well as building out its existing products and launching new ones.
Plum nabs $15.6m in a Tiger Global-led round
Health insurance startup Plum raised $15.6m in a Series A funding round led by New York-based investment firm Tiger Global. Existing investors such as Sequoia Capital India’s Surge, Tanglin Venture Partners, Incubate Fund and Gemba Capital also participated in the fundraising.
The company is looking at integrations with insurers such as ICICI Lombard, Care Health, Star Health and New India Assurance.
IsurTech Novidea tops its Series B with $15m
Novidea expanded its Series B funding round to $30m after raising additional capital from investors led by Israel Growth Partners (IGP) which was joined by a group of other investors including JAL Ventures, KT Squared, and 2B Angels.
The data-driven InsurTech company secured $15m in November last year from JAL Ventures, KT Squared and 2B Angels. Its platform enables insurance brokers and agents to drive operational efficiencies and growth across the entire distribution lifecycle.
Expense Check nets $3m, rebrands to Kanopi
Australian InsurTech Expense Check Cover has secured a funding of $3.98m in its latest funding round to grow its business overseas.
The funding round was led by Hollard Insurance. The company’s previous backers who joined the round include Folklore Ventures and Asia-Pacific head at BCG Digital Ventures Paul Hunyor.
Concurrently, the company has rebranded itself as Kanopi as part of its strategy to expand its local presence and enter the US and Canada markets. Kanopi, which was created in 2016, is a data-driven insurance technology company that links insurers and digital platforms.
Justos nabs funding from CEOS of seven unicorns
Brazilian auto insurance startup Justos raised $2.8m in a seed round led by one of the largest VC firms in Latin America Kaszek along with a slew of experienced angel investors including CEOs of seven unicorns.
Founded in 2020 by Dhaval Chadha, Jorge Soto Moreno and Antonio Molins who have all worked at various Silicon Valley-based companies including ClassPass, Netflix and Airbnb, Justos claims it will be the first Brazilian insurer to use drivers’ data to reward those who drive safely by offering fairer prices.
The product will be offered directly to consumers which will help the startup acquire maximum users in a cheaper manner than its competitors. As of now, the app is not fully open to the public. Only a select few potential customers are on the waitlist.
Green Feather gets $1.5m
Healthcare financial technology startup that spun off of Ally Commerce Inc. Green Feather raised a $1.5m seed round.
The Atlanta-based startup officially launched in April 2020 to provide more flexible payment options for healthcare patients through its platform, Feather Pay. CEO Craig Haynor said the platform adds transparency to the healthcare payments industry and helps patients pay for their treatments more efficiently by finding the best option for them.
Lightyear lands $1.5m
Europe’s first commission-free investment platform Lightyear has raised $1.5m in pre-seed funding led by Taavet Hinrikus, co-founder of Wise and Sten Tamkivi, co-founder of Teleport as the duo’s first portfolio investment, along with Jaan Tallinn, co-founder of Skype.
A cohort of angel investors including Ott Kaukver, Wander Rutgers, and Kaarel Kotkas also participated.
Founded in 2020 by early Wise team members Martin Sokk and Mihkel Aamer, Lightyear combines a low barrier to entry with a global mindset and offers a smoother alternative to the complicated nature of investing. The company waiting list is now open and it intends to start rolling out its business in Q3 of 2021.
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