Founders: Guy Goldstein (CEO), Nissim Tapiro, and Alon Huri
Launched: 2016
Headquarters: San Francisco
 $881 million
Valuation: $4 billion
Key technologies:
 Artificial intelligence, machine learning
Previous appearances on Disruptor 50 List: 0

Persephone Kavallines

Small business owners, like everyone else, are doing more online these days. Consumers can get auto or home insurance, even a mortgage, with a few clicks, and Main Street is getting more comfortable with doing its insurance business digitally.

NEXT Insurance uses AI and machine learning to provide small businesses with online access to policies in as little as 10 minutes.

Insurance start-ups have been attracting a lot of capital. Last year was a record year for insurtech, as the insurance fintech niche is known, with over $15 billion in deals, according to CB Insights. 

NEXT is among the players that have been growing rapidly, which led to multiple rounds of new capital from investors, including a $250 million financing in April of 2021 which pushed its valuation to $4 billion — double from just a year earlier.

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It has been pushing into new markets and services, including commercial property insurance and liquor liability insurance for restaurants. It acquired AP Intego, a digital insurance agency that provides business insurance products within larger small business software ecosystems, including Intuit, Gusto, Square and Toast, and its policies can now be purchased online directly through partners.

And it has a strategic partnership with Amazon as the only U.S.-based carrier participating in Amazon Insurance Accelerator, which allows it to provide sellers instant quotes.   

But it has plenty of competition too, including London-based Hiscox, which has been growing its digital footprint on Main Streets across the U.S. for a decade, and a name that may not seem immediately familiar, but should: biBerk. That’s the business insurance subsidiary of Warren Buffett’s Berkshire Hathaway

The volatile market of 2022 has taken a toll on investor appetite too, with insurtech deal volume falling 58% quarter over quarter, the biggest drop by category within fintech, according to CB Insights.

Recent attempts to upend the status quo in insurance haven’t gone as planned. High-profile insurance start-ups Lemonade and Root, while not in the small business space, have seen public market investors punish them since IPOs. The insurance giants remain stalwarts in the market as well, including The Hartford, Allstate and State Farm.

NEXT boasts of its tech-based ability to lower the cost of policies by up to 30% versus traditional players, but insurance – and to a larger degree financial services – remains a market where it is hard to unseat the name recognition and marketing spend of the giants. And technology can be a double-edged sword in this race, with a recent Deloitte survey finding that small business owners globally are open to not only cutting out the human intermediary (i.e. agent), but buying insurance and services from non-traditional providers, including banks (34%), major technology companies like Alphabet (25%), and price comparison websites (24%).

Still, NEXT seems to be positioning itself on the road to an eventual IPO, hiring Teodora Gouneva as its CFO last December, and noting her more than two decades of experience working at major investment banks and hypergrowth companies, including PayPal and Airbnb, where she worked on teams that completed successful public offerings.   

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