Once cautious stewards of idle cash, America’s biggest auto insurers are now fine-tuning their approach to venture investing to better match their core market demand, as reflected in State Farm’s more recent choice of automotive-technology company investments.
Insurance Business America analyzed every company backed by State Farm Ventures between 2019 and April 2025, along with the total equity funding those firms raised from all investors.
Between 2019 and April 2025, companies in which State Farm Ventures participated as an investor collectively raised $1.66 billion from all funding sources. State Farm’s own cheques were only part of that amount, but the direction of its money has changed sharply. Instead of spreading bets across business- and consumer-focused ventures, which were once dominant, the US’s larger P&C insurer is increasingly backing tools that shape how cars are driven, how crashes are recorded and how claims get paid.
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Fred Blumer is the CEO of Mile Auto, a pay-per-mile auto insurance technology solutions provider, a veteran automotive-technology entrepreneur, and a frequent thought leader for IBA.
Early carrier ventures were primarily attracted to the investment business’s potential returns – and “less about finding new ways to do insurance or to understand automobiles,” Blumer told IBA. More recently, venture investment has become an increasingly attractive use of insurance carriers’ idle cash, compared with historically safe bets such as real estate, securities, or government bonds.
Between 2019 and 2021, companies backed by State Farm Ventures raised US$692 million in equity from all investors. Nearly half of that (47 per cent, or about US$330 million) went into business‑technology firms that weren’t especially close to car insurance.
Hover, a 3‑D home‑imagery company, pulled in US$142 million during this period. Replicant, a contact‑centre automation platform, raised US$112 million in 2020. Homee and LiveOak, focused on property maintenance and digital customer engagement, drew US$62.4 million and US$13.5 million. HopSkipDrive, which coordinates rides for children, secured US$106 million.
By comparison, automotive and insurance‑tech firms represented a smaller slice of the pie in those years. Auto‑tech companies in State Farm's portfolio raised US$181 million total, about 26 per cent of funds raised across all State Farm-backed companies. Insurance‑techs raised US$75 million, or roughly 10 per cent.
Blumer said this reflected how some carrier venture funds first approached the practice. Some firms made clear investment mistakes during their early forays into venture investment markets, which are inherently “fraught with risks” and require “real expertise.” Since then, insurance companies’ venture technology investments have pivoted heavily toward the sectors they underwrite, such as automotive.
Blumer identified three reasons for this shift. Venture groups inside carriers, he said, have essentially decided, “‘Look, we’re not that good at making investment decisions in areas or industries we don’t know a whole lot about. Why don’t we focus on... (1) new technologies that may be of some (core market) benefit, since (2) we have a better chance of making good investment decisions if it’s aligned with our intrinsic expertise. And (3) even if we make a bad investment, there are things we can learn about the automotive industry and about insurance.’”
In 2021, dashcam provider Nexar looked like an early hint of where things were heading. The company raised US$150 million in total funding from a group that included State Farm Ventures. Nexar says its crowd‑sourced video data, second in scale only to Tesla’s, feeds autonomous‑vehicle development and even city planning, according to the company.
Such footage is becoming essential for insurers, argued Blumer. It helps evaluate drivers, especially near-misses, and sharper litigation strategies, especially in commercial fleets, he said.
By 2025, State Farm’s piece of Nexar funding would seem like a proverbial drop in the bucket, compared to the broader funding of automotive tech companies in its venture portfolio. Between 2022 and 2025, State Farm-backed firms collectively raised $908 million in total equity funding, of which more than $434 million (47 percent) went to auto-technology companies.
The standout was May Mobility. In 2023, the autonomous‑vehicle maker raised US$383 million in equity, with State Farm Ventures among its backers. That put State Farm, alongside Tokio Marine, among the first major insurers to take stakes in AV technology firms.
The AV market, Blumer said, is “terrifying to auto insurance companies. How do you manage insurance for vehicles that are either fully or partially driven by a computer?”
Questions abound around coverage type: whether a computer-driven vehicle wreck is product liability, traditional auto coverage, or otherwise, and how liability scales from driving that is merely computer-assisted (think Tesla) to entirely autonomous (Waymo). That insurance business question has been a key focus and the subject of new research patents at Blumer’s Mile Auto.
“It makes a lot of sense for a company, like State Farm, that has such a large part of the auto insurance marketplace, to invest significantly in AV technologies to better understand those risks. Because AVs are coming,” says Blumer.
In a 2022 release announcing the May Mobility investment, Michael Remmes, vice‑president of State Farm Ventures, called the company’s technology “a potential compelling advancement in the evolution of autonomous driving” that may reduce crashes and “improve road safety.”
PreAct Technologies raised $51.3 million from investors including State Farm ventures. The company develops near-field sensing and predictive safety systems designed to reduce crash severity. Beyond better damage estimates, those sensors’ ability to record G‑forces could change how bodily‑injury claims are handled, Blumer said.
“If it’s a little fender-bender that may be a 2-G event, versus something more serious like an 8- or 10-G event, the resulting bodily injury can be significantly different,” he said. “To be able to determine that more quickly gives a great opportunity for insurance companies to resolve a claim quickly, while at the same time reducing fraud.”
If auto‑tech now takes the largest slice of State Farm’s venture exposure, insurance‑technology comes a close second. Between 2022 and 2025, portfolio insurtechs raised US$345 million, or about 37 per cent of total equity funding.
Hagerty, best known as a classic‑car specialist, raised US$212 million as it expanded into a broader car‑enthusiast platform, mixing insurance with events, a marketplace and content. In a 2023 press release, the company said the new capital would “allow Hagerty to make ongoing technology investments that should drive operating efficiencies while improving customer facing interactions.”
Snapsheet, a Chicago software firm, secured US$103 million across its investors in 2023. Its focus: virtual appraisal and end‑to‑end claims automation that pushes digital tools deeper into auto claims.
Blumer sees Snapsheet as a smart model for how insurtechs should work with carriers. By bringing in multiple insurers as minority investors, the company made sure no single carrier could dominate its strategy, or scare off competitors from using its platform.
“When (companies) collect investments from a number of different insurance carriers, no single carrier controls how you do business, and your potential exit in the marketplace,” such as through an IPO or private equity acquisition, he said. Snapsheet’s success “worked out well for all involved,” Blumer added, as its image-based claims management became widely used across the sector.
“I really like the example of Snapsheet. I think companies made a good decision investing in them, and Snapsheet was smart to take investments from a number of different insurance companies.”
The changing shape of State Farm Ventures’ portfolio, and the growing size of the funding rounds it joins, illustrates the future of the insurance industry as well as its venture investment.
What started as a cautious experiment in venture capital is turning into a way to buy insight: into how cars sense their surroundings, how software drives, how impact forces travel through a vehicle, and how much of a claim can be handled with data instead of phone calls.
“The industry needs to be aware of it,” Blumer said. “There are a lot of changes that we anticipate in the market. It’s good for people in the insurance industry to be focused on (these technological investments).”
For now, State Farm’s cheques are just one part of the billions flowing into auto and insurance technology.
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