According to CB Insights, vc activity related to insurance startups hit its highest annual total in 2016 with $1.69B invested in 173 deals.
In this space, one of the first cases on thematic investors focused exclusively on investing in insurance startups comes from London with Eos Venture Partners, an independent and specialist InsurTech investment and advisory firm launched by Sam Evans.
Sam joined us, answered our questions about himself, EOS, its strategy and activity, and shared with us his opinions about new insurance models and trends.
FinSMEs: Sam, can you tell us a bit about you?
Sam: Before setting up Eos I was a partner at KPMG responsible for their global deal advisory business for insurance. I worked with many of the largest global insurers on their growth strategy, particularly around M&A. I’ve been lucky to live in Sydney, Hong Kong, Zurich and London. Over the past two years I’ve increasingly focused on how innovation is changing the insurance industry and that prompted the move into InsurTech.
FinSMEs: Let’s speak about Eos Venture Partners. What is it?
Sam: Eos Venture Partners is a dedicated InsurTech investment vehicle. We work with early stage entrepreneurs driving innovation in the insurance sector. We are one of the few independent and specialist InsurTech investors and as a result have seen strong traction amongst the start-up community. There are two principals at Eos, myself and an experienced venture capital investor from the US, Jonathan Kalman. Jonathan has an excellent track record taking early stage businesses through to successful exits (including three IPO’s and the recent sale of Inveshare, a blockchain chain focused business for $135m). Part of our approach is a strong operational focus leveraging our own capabilities and those of our operational partners to super charge our portfolio companies.
FinSMEs: What’s about Eos’ overall strategy?
Sam: Our strategy for 2017 is to raise 4-5 single purpose funds of around $15m each to provide financing for specific underlying opportunities. We will use the SPV’s as a springboard to launch a $150m InsurTech Fund. Our focus is Series A investment opportunities with Eos providing capital of between $2-5m either on an exclusive basis or as a co-investment partner with other strategic investors.
FinSMEs: How many companies do you have in the portfolio?
Sam: We have made six InsurTech investments to date and are working with four others on their investment strategy
The six investments are
1. RightIndem – a digital claims business focused on the customer
2. Neos – the first smart home insurance proposition to launch in the UK
3. Digital Fineprint – leveraging social media to drive and enhance the insurance process
4. Asset Vault – a proposition that links an online vault for physical and financial assets, insurance solutions and a fully digital will (completing in January)
5. Insure A Thing – a new business taking a completely new approach to insurance (completing in Q1)
6. Democrance – providing micro insurance to low income families in the MENA region through mobile phones (completing in Q1)
The other businesses we are working with are ActiveQuote, Galytix, Tyche and AWP.
FinSMEs: 2016 was a meaningful year for Insurtech. I think that 2017 will be the birth of a lot of new startups and the launch of innovative models globally. Do you agree?
Sam: Absolutely, InsurTech established itself as a stand alone investment sector last year and we expect the momentum to continue to build. There is a lot of hype but underneath the noise there are some excellent businesses looking to drive significant improvements in the way insurance is managed, designed, distributed, sold, perceived and bought by the customer. Innovation is now happening across the value chain and in all areas of the market.
FinSMEs: Which insurtech trends do you follow with particular attention?
Sam: We have developed five key investment themes that cover a number of areas including connected technology, data & analytics and product innovation. We have also considered the potential for innovation across the value chain, mapped that to current activity to identify areas of white space. These represent high performance potential and will influence our investment strategy going forward.
FinSMEs: Living in the UK, are you personally worried about brexit?
Sam: The uncertainty created by Brexit is not helpful but we are not seeing any material impact on current activity. London remains a key global InsurTech hub.