Insurtech funding doubles to $16b but deals shrink

Investment value jumped in 2025 even as transactions dropped to 166.

Investment in insurance technology firms increased sharply in 2025, with global private equity- and venture capital-backed investments in insurtech reaching $15.15b, more than double the $7.05b recorded in 2024. 

Despite the higher investment value, the number of deals fell to 166 from 215 a year earlier, reflecting ongoing consolidation in the sector, according to an S&P Global Market Intelligence report.

David Crofts, director of insurance mergers and acquisitions at West Monroe Capital, quoted in the report said fewer available targets and stronger competition for established insurtech firms have pushed valuations closer to those seen in the broader software sector.

One of the largest insurance-related transactions involved EQT AB’s agreement to acquire London-based secondaries firm Coller Capital Ltd. for $3.2b. 

The deal is expected to close in the third quarter of 2026 and will see State Street Corp., a minority shareholder in Coller, become a shareholder in EQT.

In the middle market, activity also continued within insurance services. 

BV Investment Partners acquired Alacrity Network Solutions, the managed repair unit of insurance claims management services provider Alacrity Solutions Group, as private equity firms maintained interest in operational and service-based insurance assets.

Fundraising remained active during the year, with several private equity firms closing or launching new vehicles targeting technology, healthcare and software-focused investments, sectors that continue to overlap with insurance and insurtech strategies.

Meanwhile, private equity megadeals reached a record high in 2025, supported by strong investor demand and large pools of undeployed capital, according to data from S&P Global Market Intelligence.

There were 22 private equity- and venture capital-backed acquisitions valued at $5b or more during the year, with a combined deal value of $311.08b. 

This surpassed the previous peak recorded in 2021. 

The rise was driven by near-record levels of private equity dry powder and a shift by large institutional investors towards established, lower-risk assets, concentrating capital among a small number of large buyout firms.

The largest transaction was the proposed $55.2b acquisition of video game company Electronic Arts Inc., announced in September 2025. 

If completed, it would be the biggest private equity buyout on record.

HarbourVest Partners managing director Scott Voss said the market could see multiple buyouts exceeding $50b as large funds continue to deploy capital into well-known businesses.