Next Insurance Raises $250M D Round to Pursue SMB Opportunity

As we follow the world of local and small business, we have covered a lot of the start-ups that are focused on disrupting the traditional operating models of local and small businesses.

To that end, we find it interesting that Next Insurance has raised another $250 million in a Series D round. The round was led by CapitalG, Alphabet’s (Google) independent growth fund, and added to the already $381 million in funding. The post-money valuation is now at $2.25 billion according to PitchBook.

Further, with between 10 and 30 million small businesses out there plus a large number of self-employed, Next Insurance has a massive TAM. This certainly speaks to the company’s ability to raise additional funds for expansion.

A Leading  New SMB Aggregator

According to the news release, the company claims it can drive down the cost of insurance by as much as 30% for small businesses and self-employed operators. And, notably, the company has been able to acquire about 100,000 business customers. This makes it a leader among new entrants in the SMB space. By way of comparison, last week we wrote that Thryv had some 45,000 customers using its SaaS solution. Both of these pale in comparison to an estimated 3.6 million businesses that use QuickBooks or even the 1 million businesses using Shopify.

Next Insurance can offer insurance solutions to some 1,300 types of businesses in 50 states and provides six insurance offerings, including General Liability, Professional Liability, Commercial Auto, and Workers’ Compensation coverage.

Transparency Matters

We went to Next’s website and reviewed some user comments. We found a few compelling comments. This one, in particular,  caught our attention. “Quick and easy; everything is black and white. No hidden information or charges.” We think this kind of feedback really matters in today’s economy. Business owners are sick and tired of being sold something by “volume instead of weight”. And from what we can read, Next Insurance offers the transparency required to deliver a compelling and differentiated buyer experience.

Next is planning to increase headcount by 50 percent in 2020. And it will add another 200 individuals over the next 12 to 18 months in Palo Alto, Austin, and Israel. Seems to us they are on to something pretty big. Do you agree?

As an aside, Next works with Yotpo, an Israeli company that itself has raised just over $125 million, to generate user-generated content. In other words, reviews, referrals, SMS marketing, visual marketing, and loyalty programs.

So why does this matter to our readers? If you dig into Yotpo’s job postings you’ll come across this: “Yotpo is looking for an SMB Tier 2 Support Engineer to join our amazing Loyalty & Referrals support team. Providing support for Yotpo’s customers, this position offers exciting interaction with diverse businesses in the eCommerce domain.

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