Key US InsurTech investment stats in Q4 2025:
- US InsurTech deal activity grew by 33% YoY in Q4 2025
- Californian firms secured a third of all US InsurTech deals in the quarter to dominate the industry
- Federato, a Californian InsurTech specialising in AI-native software for insurance underwriting and policy administration, secured one of the biggest US InsurTech deals of the quarter with a $100m Series D capital raise
US InsurTech deal activity grew by 33% YoY in Q4 2025
In the US InsurTech market, funding and deal activity showed a notable rebound heading into the end of 2025.
In Q4 2025, companies raised $834.2m, representing a 2.6x increase from the $319.7m secured in Q4 2024.
Deal volume also strengthened, reaching 36 transactions, a 33% increase from the 27 deals recorded a year earlier.
Compared with Q3 2025, funding rose sharply from $559.5m, while deal activity grew from 42 deals.
Overall, the data indicates improving capital inflows despite some quarter-on-quarter cooling in transaction volume.
Californian firms secured a third of all US InsurTech deals in the quarter to dominate the industry
At the state level, California remained the most active InsurTech hub in Q4 2025, delivering 12 deals (33% share), a 71% increase from 7 deals (26% share) in Q4 2024.
New York followed with 7 deals (19% share), marking a substantial 3.5x increase from 2 deals (7% share) in the prior year period.
Connecticut ranked third with 4 deals (11% share), newly entering the top tier.
Meanwhile, Illinois, which recorded 2 deals (7% share) in Q4 2024, fell out of the leading group.
The shift highlights continued geographic concentration in California and New York alongside some diversification into emerging state markets.
Federato, a Californian InsurTech specialising in AI-native software for insurance underwriting and policy administration, secured one of the biggest US InsurTech deals of the quarter with a $100m Series D capital raise
The round was led by Growth Equity at Goldman Sachs Alternatives, alongside continued backing from Emergence Capital, Caffeinated Capital, StepStone Group and Pear VC, as the sector accelerates its shift away from legacy systems towards AI-driven operating models.
Founded in 2020 by CEO Will Ross and CTO William Steenbergen, the San Francisco-based company has developed an end-to-end platform spanning the full insurance policy lifecycle, including midterm endorsements, renewals, extensions and premium audits, while using AI to evaluate and rank submissions in real time for underwriters.
The latest funding follows its $40m Series C completed in November 2024, taking total capital raised to $180m, and will be deployed to support ongoing product development, international expansion and aggressive hiring across data science, engineering, design, marketing and product teams as Federato seeks to capitalise on the rapid adoption of agentic AI across insurance operations.
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