Munich Re to Acquire Next Insurance for $2.6 Billion
Insurance giant Munich Re is set to acquire Next Insurance, an Israeli-founded startup, for $2.6 billion in cash. The agreement, signed by ERGO, a European insurance group and the primary insurance subsidiary of Munich Re, will see Next Insurance become part of the ERGO Group, extending Munich Re’s footprint within the U.S. small business insurance market.
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 departed the company. Since its inception, Next Insurance has raised over $1.1 billion in funding.
Key investors in previous funding rounds included TLV Partners and Oren Zeev, along with 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.
Next Insurance is a technology-driven insurtech company based in Palo Alto, California, with a development center in Kfar Saba, Israel. It is focused on serving the specific needs of small business owners in the U.S. Utilizing its proprietary technological infrastructure and a digital platform for pricing and underwriting, the company offers customized, accessible, and fully digital insurance products, including general liability and workers’ compensation coverage. Next Insurance has experienced substantial growth since its inception, 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. Currently, ERGO holds roughly 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.”
Guy Goldstein, Chief Executive Officer of NEXT Insurance, noted that this “marks a significant moment for NEXT Insurance, our customers, agents, and partners alike. 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. boasts over 30 million small businesses across more than 1,000 industries, representing 99% of all U.S. companies and contributing 44% of the country’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, creating substantial growth opportunities.
Eitan Bek, Co-Founder & Managing Partner at TLV Partners, stated, “Guy, Nissim, and Alon embraced 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.”
