While Next is focused on covering small businesses, Wefox is an insurance platform.

Next Insurance, a Palo Alto-based startup specializing in small business insurance, recently secured a significant strategic investment of $265 million. The funding came from insurance giants Allstate and Allianz’s investment arm, Allianz X. This infusion of capital marks a new strategic partnership with Allstate (NYSE: ALL) and further strengthens Next Insurance’s reinsurance relationship with Allianz (ETR: ALV). Notably, the startup, founded in 2016, has now raised over $1.1 billion in total.

Guy Goldstein, co-founder and CEO of Next Insurance, said it was the company’s mission to support small and microbusinesses across the United States. The company employs AI and machine learning to streamline the insurance purchasing process and offer coverage, catering to more than 500,000 business owners. The company’s commitment extends to serving the 33 million small businesses in the U.S. (Crunchbase)

In the insurtech industry, this funding round stands out as one of the largest this year. Insurtech startups have collectively raised nearly $11 billion in 2023, with Next Insurance securing a substantial portion of that amount. Wefox, another insurance technology group valued at $4.5 billion, also raised $55 million in debt financing from Deutsche Bank (ETR: DBK) and UniCredit (BIT: UCG). This brings Wefox’s total funding for the year to $160 million.

Wefox stands out in the insurtech landscape for its unique approach, collaborating with a network of brokers, both in-house and externally, to distribute insurance products. Additionally, it is also exploring a new model known as “affinity” distribution, where it provides its insurance software to other businesses for a subscription fee.

Wefox has received support from prominent venture capital firms, such as Salesforce Ventures and Target Global, along with established names in the financial sector like UBS (SWX: UBSG) and Goldman Sachs (NYSE: GS). The company’s substantial investment in artificial intelligence further distinguishes it, as it leverages AI to automate policy applications and customer service, with dedicated tech hubs in Paris, Barcelona, and Milan.

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Image by fernando zhiminaicela from Pixabay