What’s a likely exit strategy for lagging insurtechs?

Most insurtechs are trading at 80% below their 52-week highs, according to Alex Agus, an investor with Avid Ventures. Companies like Bright Health, Oscar Health, and Lemonade may look to be acquired.

Why should we care?
Insurtech might see a wave of acquisitions much like the fintech market consolidation that’s been led by Walmart, JPMorgan, and others. Alex Agus, the investor at Avid Ventures, thinks well-funded health insurance giants like UnitedHealth, Anthem, and Cigna could acquire companies like Oscar as a way to revamp their tech stack and enter new markets. Lemonade, meanwhile, has been trading at about $30 per share, as compared to $163 at the beginning of 2021; it, too, could be swallowed up by a more traditional competitor. Reading the stock-market tea leaves should remind us that an IPO far from guarantees long-term independence or success. With far deeper pockets and larger customer bases, enterprise competitors still have the capacity to shape fintech and insurtech in their image. Keeping tabs on giants’ intentions is just as important as surveying the landscape of up-and-coming players.