With such a large round for a Toronto-based company, does the money show Canadian startups are getting better at fundraising or that insurance tech is booming?
Toronto-based LEAGUE announced a $25 million investment Tuesday for its health insurance app. The round was led by Omers Ventures, the Royal Bank of Canada and the Manulife Financial Corp.
LEAGUE is one of many apps that suggests insurance plans for things like dental coverage and chiropractors, but it doesn’t offer its own plans. At this point, it targets employers and small businesses, many of which haven’t provided health insurance in the past.
CEO and Co-Founder Michael Serbinis told Reuters that, “Insurance is just another commodity waiting to be Uber’d.” Serbinis has past success with e-booking company Kobo, which he sold to Rakuten for $315 million back in 2011. Before that, he got DocSpace Co. acquired for $350 million.
“Insurance tech” if you will is a crowding market ranging from companies like LEAGUE that aggregate plans to startups actually offering them. Asked by Bloomberg to compare his company to the likes of Oscar or CollectiveHealth, he said their focus was on different sectors. Taken at his word, that should demonstrate how large the market really is.
Other notable insurance tech startups include San Francisco-based Embroker, which raised $12.2 million last month. Israel-based Next Insurance scored $13 million in March and Lemonade announced a $13 million seed round back in December. The most recent comparable round comes from SF startup Trov, which announced their own $25.7 million round at the end of April. That announcement was paired with proclamations of partnerships with Suncorp in Australia and AXA in the UK.
Canada has seen its own version of the funding crunch, though it could be that things are turning around. All four major Canuck startup scenes — Toronto, Montreal, Vancouver and Waterloo-Kitchener — have been rated low in terms of capital raised.
The fact that LEAGUE’s numbers match up with a round like Trov’s could speak to two possibilities: 1) Canadian companies are starting to show some parity with their American counterparts in terms of funding, or 2) insurance startups are truly worth big money no matter where they are founded (assuming they can grow their businesses across borders).
The latter is more likely, even if Canadian investment strategies are picking up on the funding problem and moving to secure American financing or to have more aggressive international plans.