2023 produced a clear bifurcation in European InsurTech funding that carried into the early 2024 data we are now seeing. Seed and pre-seed activity was broadly stable — deal count within 10–15% of 2021 peak levels. Series B and later rounds contracted sharply — late-stage InsurTech fundraising was down 40–50% from 2021 highs by deal value, consistent with the broader late-stage tech correction. The practical implication for founders is not intuitive: if you are raising seed now, you are doing so in a reasonably competitive market. If you are raising growth-stage capital, you are doing so in a market that demands substantially more proof than it did two years ago.
Why Seed Activity Held When Late-Stage Did Not
The structural explanation for seed resilience is not complicated. Seed-stage InsurTech valuations had not inflated as dramatically as growth-stage valuations during 2020–2021, so the correction in multiples had less distance to travel. Seed-stage funds — many of which, including Morildsen, were raising or deployed across 2022–2023 — were not forced into the same mark-down dynamics as growth-stage investors holding positions at 2021 valuations.
The less obvious explanation is that the correction at growth stage creates a specific seed-stage opportunity: the founders who would previously have joined well-funded growth-stage InsurTechs as employee number 30 to 80 are now available to found companies instead. The talent availability for seed-stage InsurTech founding teams improved in 2022–2023 as growth-stage hiring froze. The quality of teams we are seeing at seed has noticeably increased relative to 2020–2021, when many of the strongest engineers were being absorbed into scaling companies.
Geography Within Europe: Where the Activity Concentrated
London remained the largest volume market for European InsurTech seed rounds in 2023, reflecting the concentration of financial services talent, fintech and InsurTech infrastructure, and FCA regulatory familiarity. But the concentration share is declining. Paris, Amsterdam, Copenhagen, and Munich all saw increased seed deal volume in 2022–2023 relative to their 2019–2020 baseline. The Berlin InsurTech cluster, which generated several significant companies between 2016 and 2020, has been somewhat quieter — consistent with a broader tech market shift in Germany.
The Nordic markets are worth calling out specifically. Deal count in Denmark, Sweden, and Norway combined remains modest in absolute terms — the ecosystem is genuinely smaller than London or Paris. But the quality-to-count ratio is high. The companies emerging from Nordic InsurTech ecosystems tend to have stronger relationships with incumbent carriers from the start, reflecting the concentrated nature of the Scandinavian insurance market (where a small number of dominant carriers control substantial market share and engage directly with interesting startups at an earlier stage than their UK or French equivalents). For a seed-stage company whose primary go-to-market involves carrier partnerships, the Nordic ecosystem offers structural advantages that raw deal-count comparisons do not capture.
What the Late-Stage Contraction Means for Seed-Stage Founders
The uncomfortable reality for founders raising seed in 2024 is that their path to subsequent capital is harder than it would have been in 2021. The Series A and B investors who would have provided follow-on are applying higher bars: more revenue, longer operating history, lower burn multiples, stronger evidence of unit economics. A seed-stage founder who reaches the metrics required for a growth-stage raise in 2024 is a more accomplished operator than the equivalent founder who reached those metrics in 2021 — because the bar has moved.
We tell founders who are raising with us that the seed decision should be made against the growth-stage environment they expect to encounter in 18–24 months, not the environment at the time of seed raise. Planning a capital efficiency path that reaches meaningful growth metrics on €3–4M of seed capital — rather than assuming a generous bridge round is available — is a different product and team-building discipline. The founders who are building with this constraint in mind, in our view, are building more durable companies than those who are assuming capital availability returns to 2021 levels.
Sector Concentration Within InsurTech
Within the seed-stage rounds that did close in 2023, the sector composition shifted away from distribution-focused business models toward infrastructure and model-layer companies. This reflects investor selection for what worked at later stage in 2019–2021 cohorts: the distribution-innovation companies that scaled fastest during that period tended to be building on data and model advantages, not purely on UI/UX improvements to existing insurance products.
Claims automation attracted disproportionate deal activity in 2023. The economic logic is straightforward: claims handling is 60–80% of premium cost for most lines, and even modest improvements in leakage reduction and handling efficiency produce material loss ratio improvement at scale. The companies building ML-based claims triage and automation are solving a problem with a clear, measurable ROI — which is exactly the kind of investment case that seeds well even in a tighter funding environment.
Commercial lines InsurTech also saw increased seed activity after several years of relative neglect. Personal lines attracted the first wave of InsurTech investment because the risk is more homogeneous and more amenable to digital distribution. Commercial lines — particularly SME commercial — is where the current generation of seed-stage companies sees the greenfield opportunity.
What Founders Should Expect in 2025
Our read of the early 2024 signals is that the late-stage market correction has largely stabilised. Multiples have reset to levels that are more sustainable if less exciting than 2021. The seed market has absorbed the correction reasonably well. The growth-stage pipeline that exits from the 2022–2024 seed cohorts will start to become visible in 2025–2026 fundraising — at that point, whether late-stage appetite recovers will depend substantially on how those companies perform against the metrics they projected at seed.
For founders considering seed raises in 2025: the market is competitive, valuations are rational rather than inflated, and the most credible seed investors — those with genuine domain depth in InsurTech — are actively deploying. The structural opportunity in European InsurTech has not changed. The companies that are building genuinely differentiated risk models or infrastructure positions will find capital. The companies that are building incrementally on top of incumbent systems without a clear model-layer advantage will find it harder than they expect.