Insurance giants The Allstate Corporation and Allianz SE are making a big bet on an industry startup.
Next Insurance Inc. announced Wednesday its raised $265 million from Allstate and Allianz X, the German insurer's venture investing arm. The Palo Alto firm plans to use the money to help it move towards profitability and offer its services more widely.
Next, which offers different kinds of insurance to small businesses, also plans to team up with Allstate to offer its services to Allstate customers, it said. And it plans to rely more heavily on Allianz for reinsurnance, it said.
"Building on our existing support, we are excited to welcome Allianz X and Allstate as investors, deepen our reinsurance relationship with Allianz (Reinsurance) and foster a meaningful partnership with Allstate," Guy Goldstein, Next's CEO, said in the news release announcing the investment.
Next representatives did not immediately respond to a request for comment.
The startup, which has now raised $1.16 billion in venture funding to date, according to PitchBook, offers general liability, commercial property and workers' compensation and other types of insurance. Its target market is the 33 million small businesses in the U.S.; it already has some 500,000 customers.
Under its deal with Allstate, Next will not only market its services to Allstate customers but will also work with the big insurer to craft commercial auto insurance plans for small businesses, the startup said.
That arrangement will "bring new, innovative products to existing Allstate customers and the millions of underserved small businesses that want affordable, simple and connected protection," Mario Rizzo, president of Allstate's property-liability division, said in the release.
This is the largest equity round in Next's history, surpassing the $250 million round it raised two years ago, according to PitchBook. The company's new deal is also the largest in its sector this year, per PitchBook.
Next's backers, which include Fabrica Ventures, Founders Circle Capital, CapitalG, last valued the company at $4 billion as part of its 2021 funding deal, according to PitchBook.
