The news: Global insurtech funding reached $4.8 billion in Q2 across 162 deals, per Willis Towers Watson (WTS). And with a great Q1, insurtechs have already raised $7.38 billion in 2021, compared with $7.12 billion for all of 2020.

Here’s what drove funding activity in Q2:

• Mega-rounds. Just 15 insurtechs raised $3.3 billion, or two-thirds of total Q2 funding. The funds were mostly later-stage deals to power insurtechs’ geographical expansion: Europe-based wefox raised $650 million, one of the largest Series C rounds on record, and pet insurtech Bought By Many and insurance SaaS provider Shift Technology scored Series D rounds of $350 million and $220 million, respectively.
• Distribution. Insurtechs focused on distribution (digital brokers and MGAs) accounted for 10 of the 15 mega-rounds and 55% of all deals. They use tech to help customers digitize insurance sales, like via price comparison site The Zebra or commission-less life insurer Ethos Life.
• Geography. Insurtechs from 35 countries raised funding, compared with 26 countries last quarter. New markets to make it on the insurtech funding map included Botswana, Mali, and Turkey.

The future of the insurtech space: Despite early-stage deals composing 57% of all deals, the concentration of funding volume among later-stage players calls into question younger startups’ longevity.

In 2020, WTS estimated that 184 insurtechs globally were close to or had shut down since 2010. It now puts this number at 456. To calculate this, they looked at startups that have raised less than $10 million overall, have not exited or raised capital in more than two years, and are outside the top 25% in CBInsights’ tech company health metric, Mosaic Score.

The number of insurtechs stagnating will likely increase as established players draw from their combined $3.3 billion in capital to make acquisitions and collaborate to consolidate and block out newcomers. In Q2 alone, B2B insurtech Cambridge Mobile Telematics acquired True Motion to work with 21 out of the 25 largest US auto insurers and reach 20 countries. And Metromile and Hippo partnered to offer consumers a bundled auto and homeowners insurance product.