Munich Re acquiring Next Insurance at $2.6 billion valuation
The acquisition will see the digital insurer become part of Munich Re’s ERGO Group, expanding its presence in the U.S. small business insurance market.
Insurance giant Munich Re is acquiring Israeli-founded startup Next Insurance. The companies have signed an agreement for the full acquisition of Next Insurance for $2.6 billion in cash by ERGO, a European insurance group and the primary insurance subsidiary of Munich Re.
Next Insurance, headquartered in Palo Alto, California, was founded in 2016 by Guy Goldstein, who serves as the company's CEO, along with Nissim Tapiro and Alon Huri, who recently left the company. Since its inception, Next Insurance has raised over $1.1 billion. Among its key investors in previous funding rounds were TLV Partners and investor Oren Zeev, who participated early and continued to invest in subsequent rounds. Other notable investors include Munich Re, CapitalG, Battery Ventures, FinTLV, and Group11. The company’s most recent funding round took place a little over a year ago at a valuation of $4 billion.
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Next Insurance founders Alon Huri, Guy Goldstein and Nissim Tapiro.
(Credit: Next Insurance)
Next Insurance is a technology-driven insurance company headquartered in Palo Alto, California, with a development center in Kfar Saba, Israel. It specializes in serving the unique needs of small business owners in the U.S. Through its proprietary technological infrastructure and digital pricing and underwriting platform, the company offers tailored, accessible, and fully digital insurance products, including general liability and workers' compensation coverage. Since its founding, Next Insurance has demonstrated significant growth, generating $548 million in revenue in 2024. It currently serves over 600,000 customers and employs approximately 700 people, including about 200 in its Israeli offices.
ERGO Group and Munich Re have been closely involved with Next Insurance since 2017. ERGO currently holds approximately 29% of Next Insurance's share capital. As part of ERGO Group, Next Insurance is expected to contribute hundreds of millions of dollars in net profit in the medium term, with substantial additional earnings potential in the future.
“This transaction marks the start of a new chapter for ERGO. Together with NEXT Insurance, we will tap into a highly attractive market overseas, unlocking significant growth opportunities while further diversifying our existing business portfolio,” said Markus Rieß, Chief Executive Officer of ERGO Group. “At the same time, we will work with NEXT Insurance to leverage their cutting-edge technology and our technical excellence, contributing to our commitment to sustainable, profitable growth.”
“Today marks a significant moment for NEXT Insurance, our customers, agents, and partners alike,” noted Guy Goldstein, Chief Executive Officer of NEXT Insurance. “Over the past few years, we have transformed the U.S. small business insurance market by delivering a simple, seamless, tailored experience for business owners. This transaction will propel us forward, allowing us to scale our technology driven approach and empower even more small business owners with innovative insurance solutions. With the strength and expertise of ERGO and Munich Re and their well-recognized re/insurance know-how, we are poised to lead the charge in reimaging small business insurance in the USA.”
The U.S. is home to over 30 million small businesses across more than 1,000 industries, representing 99% of all companies in the country and contributing 44% of U.S. GDP. However, insurance penetration remains relatively low, with 75% of small businesses considered underinsured. The total addressable market is highly fragmented and estimated to be worth approximately $175 billion, presenting substantial growth opportunities.
Eitan Bek, Co-Founder & Managing Partner at TLV Partners, said: “Guy, Nissim, and Alon took on one of the most traditional industries and built a category-defining company from the ground up. Investing in them for the second time was an easy decision, following my first journey with them when they built Check, which was acquired by Intuit. Next Insurance’s $2.6B acquisition by Munich RE is a testament to their vision and execution, and we’re proud to have been part of the journey from day one.”
