Sector Snapshot: Insurtech Funding Is Way Down, But AI Is Still Driving Some Big Deals

For obvious reasons, insurance-related technology isn’t exactly one of the sexiest investment areas for VCs, which might explain why funding and deal count are both down this year, per a review of Crunchbase data.

But insurance impacts everyone in one way or another, and the sector is also one of the areas that shows great promise for artificial intelligence. Indeed, many of the venture deals that have gone into the sector this year have been around AI and automation. Funded insurtech startups are using AI for functions such as streamlining underwriting, automating claims processing, improving risk assessment, and reducing manual work.

The broad trend: Even before the pandemic-fueled funding peaks, insurtech startups received more than double the amount of venture funding in 2019 than they have in more recent years. While investors haven’t given up on insurtech, funding to startups in the space is down in 2025 and deal count is at a multiyear record low.

The numbers: So far in 2025, global insurance-related startups have pulled in about $3.9 billion in seed-through growth-stage financing, per Crunchbase data — almost less than one-fourth of the 2021 peak dollars raised — with deal counts also on the decline. The lower deal count signals both potentially decreased investor interest in the space, as well as larger round sizes.

Noteworthy recent rounds

Several large megadeals took place this year, many of them in this final quarter. Unsurprisingly, one of the largest recipients of venture capital often cited AI as an area of focus.

In October, San Francisco-based CyberCube raised $180 million in a venture round led by Spectrum Equity. Founded in 2015, the company noted at the time of its fundraise that deeper adoption of AI technology has been a part of its strategy since its inception.

“CyberCube has continued to harness the power of its proprietary AI toolset and internet-scale large language models to drive insights from complex data to solve clients’ biggest problem – to meaningfully quantify cyber risk to maintain profitability and sustainability,” the company said in a news release.

And, in recent weeks, Austin-based 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 a pledge of $0 out-of-pocket costs. The startup uses AI to power its member experience in combination with human support. Investors include DCVC, Refactor, Duquesne Family Office, Jam Fund and Upside Vision Fund.

On Dec. 3, Angle Health raised $134 million in a Series B financing to grow its own AI-driven healthcare benefits offering. Portage Ventures led the 6-year-old San Francisco startup’s raise, which also included participation from Y Combinator, Wing Venture Capital and others.

And in January, Boston-based Openly brought in $123 million in a growth financing 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 funding

There were smaller insurtech raises as well, for companies working on a variety of insurance-related issues, many of them centered around automating aspects of the claims process.

While funding is undoubtedly down from the peak, it’s also clear that insurtech isn’t dead. The industry’s newest winners just look a little different than the straight D2C plays we’ve seen in the past, as they are more focused on infrastructure and workflows. If that’ll make it easier and cheaper to get insurance, that’s not a bad thing.