For obvious reasons, insurance-related technology isn’t exactly one of the most attractive investment areas for venture capital firms, which could explain why funding and deal counts are both down this year, according to a review of Crunchbase data.
But insurance affects everyone in one way or another, and the sector is also one of the most promising areas for artificial intelligence. Indeed, many of the venture capital deals made in the sector this year were in AI and automation. Funded insurance startups are using AI for functions such as streamlining underwriting, automating claims processing, improving risk assessment, and reducing manual work.
The big trend: Even before pandemic-fueled funding spikes, insurtech startups received more than double the amount of venture capital funding in 2019 compared to recent years. Even though investors have not abandoned insurtech, funding for startups in the sector is down in 2025 and the number of deals is at a multi-year high.
The numbers: So far in 2025, global insurance-related startups have raised approximately $3.9 billion in growth-stage seed funding, according to Crunchbase. data – nearly a quarter of the peak dollars raised in 2021 – and deals are also counting on a decline. The lower number of deals indicates both a potential decrease in investor interest in the space, as well as a larger round size.
Notable recent tours
Several large megadeals have taken place this year, many of them in this last quarter. Not surprisingly, one of the largest recipients of venture capital has often cited AI as an area of interest.
In October, based in San Francisco CyberCube raised 180 million dollars in a financing round led by Spectrum Equity. Founded in 2015, the company emphasized at the time of its fundraising that further adoption of AI technology had been part of its strategy since its inception.
“CyberCube has continued to harness the power of its proprietary AI toolset and large-scale internet-scale language models to extract insights from complex data to solve customers’ biggest problem: meaningfully quantifying cyber risks to maintain profitability and sustainability,” the company said in a press release.
And, in recent weeks, based in Austin Curative raised $150 million in a Series B financing that valued the startup at $1.275 billion. Founded in 2020, Curative created and launched an employer-based health insurance plan that focuses on preventative care and commits to no out-of-pocket costs. The startup uses AI to optimize its members’ experience in combination with human support. Investors include DCVC, Refactor, Duquesne Family Office, Jam bottoms And Upside Down Vision Fund.
On December 3, Angle health raised $134 million in Series B funding to develop its own AI-based healthcare service offering. Business Portage led the raise of the 6-year-old San Francisco startup, which also included participation from Y combiner, Wing Venture Capital and others.
And in January, based in Boston Openly brought $123 million in growth funding led by Eden Global Partners. Founded in 2017, the company offers home, auto and life insurance services using AI to generate quotes.
Early-stage insurtech financing
There were also more modest increases in the insurance space, for companies working on a variety of insurance-related issues, many of which focused on automating certain aspects of the claims process.
While funding is undoubtedly down from the peak, it’s also clear that insurtech is not dead. The new industry winners look just a little different from the simple D2C games we’ve seen in the past, as they are more focused on infrastructure and workflows. If it makes getting insurance easier and cheaper, that’s not a bad thing.
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Illustration: Dom Guzman
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