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German insurance giant ERGO Group, the primary insurance arm of Munich Re, has acquired Israeli-founded NEXT Insurance in a $2.6 billion all-cash deal, the companies announced Sunday. Upon completion, NEXT will become part of the ERGO Group.
Founded in 2016 by CEO Guy Goldstein, Nissim Tapiro and Alon Huri—who left the company last year to join Team8—NEXT Insurance is headquartered in Palo Alto, California, with a research and development center in Kfar Saba, Israel.
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NEXT Insurance founders Nissim Tapiro, Guy Goldstein and Alon Huri
(Photo: NEXT Insurance)
The company focuses on the specialized insurance needs of small businesses in the United States, offering fully digital and tailored products such as general liability and worker’s compensation coverage through its proprietary tech and pricing platform.
NEXT Insurance has raised $1.1 billion to date, with its last funding round in November 2023 valuing the company at $4 billion. Early and repeat investors include TLV Partners and tech investor Oren Zeev, along with Munich Re, Capital G, Battery Ventures, FinTLV and Group 11.
The company has experienced significant growth, reporting $548 million in revenue for 2024 and serving more than 600,000 customers. It employs roughly 700 people, including 200 in its Israeli office.
The U.S. market, where NEXT operates, includes more than 30 million small businesses across 1,000 sectors—accounting for 99% of all American companies and 44% of U.S. GDP. Despite this, insurance penetration remains low, with 75% of small businesses considered underinsured. The fragmented market is estimated at $175 billion, offering major growth potential.
ERGO and Munich Re have been closely involved with NEXT Insurance since 2017. ERGO currently holds a 29% stake in the company. As part of the acquisition, NEXT is expected to contribute hundreds of millions of dollars to ERGO’s net profit in the medium term, with further growth potential projected.
“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.”