The grid is under pressure.

While energy demand is skyrocketing, fossil fuel retirements are accelerating, and renewables can’t always deliver when and where we need them. In this new energy landscape, resilience doesn’t just come from generation, it also comes from storage — and specifically, long-duration energy storage (LDES) that delivers clean, reliable power for hours, even days.

As investors focused on technologies that will rewrite the operating system for the modern grid, MRV has long been convinced of the need for impactful energy storage solutions.

Built on decades of scientific research and engineered for utility-scale deployment, high-temperature thermal battery systems offer one of the most promising LDES solutions we’ve seen. These systems convert excess electricity into stored thermal energy using resistive heating and recover it through high-efficiency thermophotovoltaics.

It’s safe, scalable, and critically, highly economic.

Why the Grid Needs New Storage Solutions Now

For over a decade, U.S. energy demand was flat. Today, it’s surging, driven by electrification, data centers, and the expansion of reshored manufacturing. Utilities are scrambling to respond, but building new fossil generation is costly, slow, and increasingly difficult to finance. Despite the surge of renewables, they’re non-dispatchable and cannot guarantee availability when most needed.

That’s created a massive gap in grid planning. How do you store excess energy when the sun is shining and the wind is blowing, and release it when it’s not? Four-hour lithium-ion batteries have helped bridge that gap, but we’ve reached the limit of what short-duration batteries can do.

What the grid needs now are clean, cost-effective systems that more flexibly shift energy across longer time horizons, storing energy for 10 or 20 hours, and achieving it without risk of fire, reliance on rare materials, or prohibitive costs.

The Fourth Power Solution: Heat, Not Chemistry

Fourth Power moves beyond just LDES into flexible duration with their novel high-temperature thermal energy storage system that solves utilities’ storage challenge.

Using low-cost, domestically abundant materials like graphite and liquid tin, their batteries store energy as heat and convert it back to electricity using thermophotovoltaic (TPV) cells, a type of solar cell optimized for radiant heat instead of sunlight.

Here’s why that matters:

• High power density: Power generation via TPV scales to the fourth power of temperature. Fourth Power’s system heats graphite blocks to 2400°C, enabling a higher energy-to-footprint ratio than low-temperature systems.
• Safety and simplicity: No risk of thermal runaway, simple supply chains, straightforward design. The system operates in an inert environment (argon), eliminating fire risk, toxic byproducts, or chemical volatility.
• Flexible architecture: Their modular design separates power and energy, a key distinction from electrochemical batteries. In other words, utilities can size systems based on site-specific discharge duration requirements and expand capacity over time as grid needs evolve. Start with 10 hours. Scale to 20, 30, or more.
• Economic viability: With minimal balance-of-system complexity, low-cost materials, and proven components, Fourth Power’s system is built to compete head-to-head with natural gas and long-duration lithium-ion on both capex and levelized cost of storage (LCOS).

Fourth Power is going straight to the heart of the grid, providing firm, dispatchable, zero-carbon electricity that utilities and independent power producers (IPPs) can count on.

Led by Experts, Built for Scale

When we evaluate startups building towards a more resilient future for humanity, we look for three core capabilities: breakthrough technology, strong commercial instincts, and proven operational experience to scale complex systems. Fourth Power checks all three boxes.

Behind the technology is a team that blends scientific rigor with real-world execution. Founder and Chief Technologist Asegun Henry, a renowned MIT professor with 160+ publications in thermal systems, invented the core technology. CEO Arvin Ganesan brings deep policy and commercial expertise from his time leading global energy policy at Apple. EVP of Operations Fred Huang scaled factories at Tesla and Rivian and is now applying that experience to Fourth Power’s U.S.-based manufacturing model, where they aim to assemble modular systems using standard components from existing supply chains.

Together, they’ve designed a product and go-to-market approach that fits directly into how utilities buy, operate, and rate-base new infrastructure. By selling their battery systems as hardware, not a service, Fourth Power aligns with utility procurement models and reduces friction in the sales process.

A Safer, Smarter Storage Standard for the Grid

Utilities and energy developers have been waiting for a long-duration storage solution that’s real, reliable, and ready. With flexibility, modularity, safety, and cost-effectiveness baked into its core design, Fourth Power is poised to become a key building block for a grid in transition.

We’re excited to back Fourth Power as they bring a critical energy storage solution to life, exactly when the grid needs it most.

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Munich Re Ventures (MRV) is the venture capital arm of Munich Re Group, one of the world’s leading providers of reinsurance, primary insurance, and insurance-related risk solutions. With more than $1 billion in assets under management, Munich Re Ventures invests in the most innovative start-ups transforming the future of risk and risk transfer. MRV’s experienced investors are financially-driven while focused on the strategic interests of Munich Re and the broader insurance industry. MRV works closely with Munich Re Group businesses across the globe to fund and partner with the best emerging companies developing new technologies and business models — and risks — for tomorrow’s world.

On August 27th, 2025, the world witnessed the 10th test flight of the Starship spacecraft. Spectators watched a 400-foot rocket rise into the heavens atop a thunderous pillar of fire. The mission entailed a demo deployment of “mock” Starlink satellites, followed by a successful re-entry and controlled splashdown of the rocket’s first stage. A live commentator summed it up best: “That was absolutely incredible.”

This test is a massive win for SpaceX after a string of recent launch failures, showcasing the incredible capabilities of the most powerful rocket on earth. And though the next few months may continue to show a mix of successes and disappointments in its launches, the overall industry trajectory remains clear: commercial rockets have entered a new era.

SpaceX’s Starship — as well as Blue Origin’s New Glenn, ULA’s Vulcan Centaur, and Arianespace’s Ariane 6 — are more than just very big rockets. Indeed, we believe they represent a coming wave of new heavy-lift launch vehicles that are poised to be a catalyst for a major evolution of the space economy.

Two years ago, we shared how we believed it was time to focus on the ‘picks and shovels’ of the space economy, in reference to the 19th century California Gold Rush. To further extend the analogy, we now contend the following: New low-cost launch innovations being ushered forth by heavy-lift launch providers are akin to the Transcontinental Railroad — using technology to better connect “east” and “west” (or in this case, earth and space) for the transport of people, goods, and civilization.

We anticipate that the sheer scale, cost-efficiency, and versatility of these larger launch platforms will usher in a new age of commercial space.

Super-Size Me — New Large Launch Platforms Offer More

New launch platforms are reaching, and at times surpassing, milestones not seen since the heady days of the space race — and are for the first time bringing this heft to the commercial market at scale. The SpaceX Starship holds the record for the most powerful launch vehicle ever built. A former NASA administrator called Blue Origin’s New Glenn “the closest rival to the Saturn V seen in 50 years”.

Here’s what this class of large launch platforms is bringing to market that makes them truly novel:

• Increased Payload Capacity — Starship will offer the largest payload capacity ever available, and once it reaches operational maturity (i.e., launching 3 times a week), it will bring more mass to orbit than all of humanity’s previous space missions combined.
• Full and Rapid Reusability — New launch platforms are prioritizing reusability, building to require little to no refurbishment between launches: Vulcan Centaur uses a SMART system (Sensible Modular Autonomous Return Technology) that focuses on reusing its expensive engine section, New Glenn is designed to have a reusable whole first stage, and Starship is designed with full reuse in mind. Long gone are the days of prohibitively expensive, expendable rockets.
• Mass Manufacturing — A focus on reusability has led to new designs leveraging a broader set of more ubiquitous materials. SpaceX has expanded use of stainless steel in rocket structures for Starship, a conventional and widely available material that can be easily shaped and machined. It is affordable and handles the stresses of both extreme cold and heat very well (ideal for space and re-entry applications). Others are using advancements in equipment, such as automated fiber placement (AFP) machines and 3D printers to make manufacturing of cumbersome materials (e.g., carbon fiber) easier to mass produce — essential for launch platforms with ambitions to deploy hundreds of rockets concurrently.
• Reduced Launch Cost to Orbit — High payload capacity and full reusability will bring launch costs down by orders of magnitude. This will further unlock a flourishing and more accessible space ecosystem for a variety of use cases across industries.

Extra Legroom Goes a Long Way

As Austin Link, the CEO of Starfish Space, shares, “Satellites look completely different without mass and volume constraints. Higher power satellites are significantly more capable. At current scales they are already critical to everyday life throughout the world, but what happens if satellites are 2–3 orders of magnitude more capable?”

It’s clear that this new large launcher landscape will have significant impacts on the future space economy. Here’s what we see:

• From LEO to GEO — Over the past decade, LEO (Low Earth Orbit) has enjoyed a renaissance. Declining launch costs, rapid technological advancements, and miniaturization have fueled the deployment of agile and inexpensive satellites, and startups have rushed to capitalize — revolutionizing satellite services and connectivity in the process. Nonetheless, higher altitude GEO (Geostationary Earth Orbit) remains the backbone of global communications, offering continuous coverage of vast regions of the Earth with far fewer satellites than is required by LEO. We anticipate a resurgence of interest in this higher orbit, spurred by a combination of lower launch costs and government investments in critical infrastructure for defense, communications, and private-sector innovation.
  
  Drawing lessons from LEO, companies like Astranis are designing and deploying robust, smaller, and more cost-efficient GEO satellites. Advances in satellite servicing and life-extension technologies by companies like MRV’s portfolio company, Starfish Space, may further tip the balance by mitigating GEO’s traditionally high costs and static designs.
• Evolving Satellite Design: The reduction in launch costs, paired with a large increase in payload fairing size, will rewrite the manual on satellite and space infrastructure design. Historically, minimizing size and mass to orbit has been the most critical design constraint for satellite operators. Now, instead of optimizing for small footprint to save on launch costs, space ecosystem players can focus on other aspects and capabilities of their space-bound product.
• Improving Reliability of Satellite Platforms: A new satellite design envelope could unlock another benefit — improved reliability. Larger, lower cost launch capabilities mean satellite builders have more margin to build resilient platforms, for example, by adding in redundant components such as thrusters. An increase in resiliency should result in fewer non-collision event failures. For the space insurance market, 2023 was one of the worst years for losses on record and it was largely driven by losses caused by non-collision events. An ecosystem-wide improvement in satellite reliability could restore confidence in insurance underwriters by mitigating risk.
• Enabling In-Space Manufacturing: Space offers a surprisingly ideal setting for manufacturing that ranges from pharmaceutical ingredients to high-quality chips. Formulation and assembly in the microgravity of space is free of sedimentation, convection, and buoyancy, allowing for an environment that favors weaker forces such as material surface tension and diffusive properties. Lower mass-to-orbit costs will unlock the construction of orbital facilities and cheaper transport of raw materials for production. Companies like Varda Space Industries, Axiom Space, and Redwire Space are currently building with this in mind.
• Delivering Cargo Point to Point: The potential of these launch platforms to serve as rapid “point to point” cargo delivery offerings on Earth is substantial. A large launcher Starship can carry a C-17’s worth of cargo and fly anywhere in the world in an hour. Startups like Outpost Space are working on rapid orbital deployment of earth-centered resources.
• Building Space, Lunar, and Martian Infrastructure: Startups like Lunar Outpost, Astrobotic, and Starpath are focused on enabling humanity’s lunar future through robotics. Reflect Orbital is building orbital installations to increase energy generation on Earth via the sun. Each of these companies operates with the assumption that large launch vehicles (and all their benefits and capabilities) will be commercially available. MRV portfolio company Orbit Fab is developing the infrastructure for in-space refueling, a key enabling technology for many of these proposed new business models in space.

Ushering Forth the Space “Transcontinental Railroad”

Based out of San Francisco — a city built by the California Gold Rush — our team members apply that same pioneering spirit to discovering breakthrough technologies. To this end, MRV leverages the expertise and history of our parent company, with Munich Re’s space underwriting team serving as one of the leading insurers of space globally — including launch and in-orbit insurance. As the space industry continues to rapidly evolve, the associated risks require new insurance solutions.

As the famous quote goes, “any sufficiently advanced technology is indistinguishable from magic.” While these new launch platforms have more goalposts to hit before achieving reliability and commercial effectiveness, never before has the veil between science fiction and reality felt thinner in regard to what’s possible for the space economy.

We continue to believe our future as a planet and a society depends on space. Whether we develop faster and more sensitive cures for disease in microgravity environments, mine rare metals without destroying our terrestrial environment, or continue to improve telecommunications on Earth — space already matters a lot to everyone on Earth, and its importance will only grow over time.

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Munich Re Ventures (MRV) is the venture capital arm of Munich Re Group, one of the world’s leading providers of reinsurance, primary insurance, and insurance-related risk solutions. With more than $1 billion in assets under management, Munich Re Ventures invests in the most innovative start-ups transforming the future of risk and risk transfer. MRV’s experienced investors are financially-driven while focused on the strategic interests of Munich Re and the broader insurance industry. MRV works closely with Munich Re Group businesses across the globe to fund and partner with the best emerging companies developing new technologies and business models — and risks — for tomorrow’s world.

The future is now — and it is energy intensive, driving the need for action today.

A growing demand for new data centers, electric vehicles, and electrified industrial and manufacturing plants (not to mention growing global populations and modernizing economies) are all coalescing to drive electricity demand to heights heretofore unseen. In 2024, global electricity consumption rose 4.3%, significantly faster than the 2.7% average between 2010 and 2023.

The global energy sector is undergoing an historic transformation driven not only by accelerating demand, but also by technological advancement and climate imperatives. Despite this, the industry remains rife with constraints that impede innovation, from large regulatory hurdles and multi-stakeholder dependencies to slow, risk-averse customers.

Electric utilities are not incentivized to innovate — their mandate is to provide safe, reliable, and affordable energy to customers, sometimes leading them to deprioritize trialing new, first-of-a-kind technologies. Yet to continue to fulfill that mandate tomorrow, it is necessary for them to innovate today.

This transformation occurs against a backdrop of increasing risks to the energy sector: the grid is aging, driving the threat of catastrophic equipment failure; labor shortages complicate modernization efforts; the increasing frequency of extreme weather events places immense strain on the grid. Despite these challenges (or perhaps due to them), the energy transition presents a rare opportunity to modernize a slow-moving industry and embed critical innovations across the value chain.

Our corporate parent, Munich Re, is far from new in risk management across the utility and electricity space. As Roman Beilhack, Global Head of New and Green Technologies at Munich Re shares, “From insuring solar project performance risk to insuring against energy storage degradation or the underperformance of hydrogen related fuel cells, Munich Re has a rich history in assessing risks of global electricity grids.”

At Munich Re Ventures (MRV), we invest in innovative startups at each stage of an electron’s path through the energy value chain: generation, transmission & distribution, storage, and demand. As the energy industry reckons with the changes that must occur to meet the needs of our economy, MRV is focused on the innovations that will move us toward a decarbonized, cost-effective, and secure grid.

Meeting Growing Demand: Energy Generation

Rapid expansion of renewable energy is driving a new paradigm for electricity generation. While renewables generate only ~20% of the electricity on the US grid today, they represent over 95% of interconnection queue capacity (i.e. projects that have requested to connect to the grid), pointing to a dramatic shift toward renewable sources in the future. This is even truer for Europe, where renewables already generate ~40% of electricity in select countries.

This poses a challenge for grid operations (with Spain’s recent nationwide power failure providing a clear example of the stakes at hand). Fossil fuel generators are dispatchable, meaning they can quickly ramp energy generation up or down to match supply with demand. Traditional renewable resources, instead, are intermittent — solar production occurs when the sun is shining, and wind energy only flows when it is windy — and cannot always be called up by grid operators if they need more energy.

FERC’s recent reliability assessment paints a concerning picture: prices are expected to be higher this summer in most areas and capacity margins are slim. If the load is higher than FERC estimates, we might even experience rolling blackouts. “We are losing dispatchable generation at a pace that is not sustainable and we are not adding sufficient equivalent generation capacity,” FERC Chairman Mark Christie said. “Today’s assessment brings that point home.”

Therefore, we must not only grow traditional renewable resources (ie. wind and solar) but also support clean dispatchable resources. This includes geothermal and nuclear energy — through small modular reactors (SMRs), traditional fission, and even fusion. These resources carry their own challenges, including development risk, cost overruns, and tech development. To achieve a fully decarbonized grid, these technologies must achieve rapid scale.

Innovations to support traditional, intermittent renewable resources abound, as well. The prime locations for wind and solar — sites with the best resources near high-capacity grid interconnection points — have already been developed, leaving less favorable sites for newcomers. New technologies can improve the economics of these sites and make them more viable, with advances in robotics, drones, computer vision, and AI-powered site optimization all serving as possible paths to decrease project capital expenditure.

Portfolio Spotlight: Zanskar Geothermal

Challenges in identifying geothermal resources have limited geothermal energy growth, since the economic viability of a site depends on hyperlocal variations in conditions. MRV portfolio company, Zanskar, applies AI models to advanced sensing techniques, homing in on the exact location of the best resources. Zanskar recently used their technology to identify and acquire an underperforming geothermal resource that, eight months later, proved itself to be a “world-beating gusher” — a huge validation of Zanskar’s technology.

The Overlooked Bottleneck: Transmission & Distribution

While significant investment has poured into renewable energy generation, less attention has been paid to the cable infrastructure that moves energy to where it’s needed. Yet, transmission and distribution are just as critical to the energy value chain.

Much of today’s transmission infrastructure is aging, often operating well past its intended service life. This poses mounting risks to grid reliability, especially as climate change drives more frequent and extreme natural disasters. Equipment failures, like the broken hook that caused the deadly Camp Fire in 2018, highlight the urgent need for solutions. Technologies that monitor equipment health and detect faults in electric lines in real time are critical in preventing disasters and bolstering resilience.

At the same time, new transmission infrastructure is required to support growing energy demand and the rapid growth of renewable resources. But expansion is lagging. Across the US, a shockingly low 55 miles of new transmission lines were built in 2023, a pace wildly insufficient for the scale of clean energy deployment that is needed. Over 2.6 TW of clean energy capacity are currently stalled in interconnection queues, partially due to inadequate transmission infrastructure.

Addressing this shortfall requires more than just building new lines. Two innovations can help beyond additional capacity buildout:

• Real-time grid optimization: The grid is built for worst-case scenarios (meaning peak demand, plus an additional buffer) and often operates with excess capacity. New software and sensor technologies help grid operators dynamically manage flows, respond to real-time conditions, and squeeze more performance out of existing infrastructure.
• Transmission loss reduction: Transmission and distribution is responsible for 5% of the energy loss on the grid. Technologies, such as solid-state transformers, can minimize those losses, reducing the amount of energy production required in the first place.

Portfolio Spotlight: VEIR

Power transmission bottlenecks are rapidly worsening across the electricity value chain, particularly as AI drives demand for power-hungry GPUs in data centers. Traditional transmission upgrades can take a decade due to permitting, regulatory, and land-use challenges. MRV portfolio company, VEIR, offers a breakthrough: superconducting power systems that deliver 10x more power than conventional solutions at the same voltage. By avoiding the need for new rights-of-way, VEIR enables faster, less disruptive grid expansion — ideal for relieving power congestion near large AI data centers. The grid needs a smarter path forward, and VEIR is delivering it.

Enabling Flexible Systems: Energy Storage

Grid stability depends on the real-time balance between energy supply and demand. Imbalances cause frequency and voltage fluctuations that can harm infrastructure and connected equipment.

Energy storage plays a vital role in correcting this imbalance, soaking up excess energy when demand is low and discharging it when demand is high, balancing the grid on a millisecond basis and stabilizing grid frequency and voltage. On a larger scale, batteries support more extensive grid optimization, such as deferring transmission and distribution upgrades and shaving peak loads.

Despite these benefits, today’s market structures often fail to properly financially reward storage for the full range of services it provides. Energy markets were originally designed around fossil fuel generators, not flexible assets like batteries, and markets have yet to be created for many of the services that batteries offer. Utilities and regulators are still adapting to assessing the dual nature of batteries — both consuming and producing energy.

As a result, batteries are often penalized with costly interconnection upgrades based on assumptions that they will charge during peak periods, when in reality they’re more likely to reduce stress on the grid. Without incentives that reward their true value, many battery projects struggle to justify the economics despite clear system-wide benefits. Aligning market structures and regulatory frameworks with the capabilities of energy storage is critical to accelerating deployment.

Lithium-ion batteries have dominated market growth, driven by falling costs and a mature supply chain. They will likely continue to dominate in shorter-duration use cases. But as grid needs evolve, especially as multi-hour to multi-day use cases evolve, alternative storage forms will need to scale.

The “killer solution” in long duration energy storage (LDES) remains forthcoming, with thermal energy, electrochemical, and mechanical storage solutions all vying for the top spot. To achieve mass adoption, LDES must achieve cost reductions or benefit from expanded market mechanisms that reflect the full value of long-duration flexibility. As demand for longer duration storage grows in individual markets like California and Massachusetts, opportunities to de-risk novel LDES technologies will help drive these outcomes.

Portfolio Spotlight: Found Energy

Decarbonizing heavy industry requires solutions not solely for long duration grid scale electricity, but also for on-demand high temperature heat. MRV portfolio company, Found Energy, addresses this challenge by using solid aluminum, including unrecyclable scrap metal, as a medium to store and release energy. Their system produces hydrogen and high-temperature heat on-demand for industrial customers, reducing reliance on fossil fuels or grid-based electricity.

Making the Better Use Case: Energy Demand

While much of the energy transition conversation focuses on increasing renewable supply, demand-side solutions are also critical. Innovations in energy demand fall into two key categories: efficiency (reducing energy needs) and optimization (shifting when and how energy is used).

The most effective energy resource is energy that is never used, famously dubbed the “negawatt”. Basic behavioral changes (ie. turning off lights or adjusting thermostats) have always helped reduce demand, but the real breakthrough has come from technologies that automate these actions. Motion sensors and smart thermostats made these efficiency measures more ubiquitous, scaling quickly by integrating into daily life while improving comfort and convenience.

Next-generation energy efficiency technologies will follow this same logic and will benefit from the digitization of the built environment and advances in AI. As we collect more granular data on how we live and work, intelligent systems will optimize energy consumption in real time, reducing load without sacrificing comfort. Sensors and IoT devices will detect when equipment is operating inefficiently and use machine learning to proactively correct performance issues.

Digitization also unlocks opportunities in demand optimization. Real-time analytics can guide energy use across homes, businesses, and industrial sites to align consumption with grid needs. As energy markets compensate demand-side flexibility, new innovations in virtual power plants (VPPs) — networks of collectively managed distributed energy resources and loads that function like a centralized power plant — are creating new revenue streams by helping users reduce loads during peak demand.

Portfolio Spotlight: SPAN

Understanding and controlling home energy use starts at the circuit level. MRV portfolio company, SPAN, designs products to enable rapid home electrification on current grid infrastructure. SPAN’s holistic offering gives homeowners peace of mind and the freedom to electrify while establishing a new category of at-the-meter technology for utilities to increase utilization of existing distribution networks and reduce costs.

Managing Risk & Unlocking Innovation

The energy sector powers our homes, businesses, and economy, but it also faces growing risks from aging infrastructure, a changing climate, and outdated regulatory models. These challenges, however, open the door to technological breakthroughs and new business models — the kind of transformative opportunities that drive our investment strategy at MRV.

New types of technology introduce their own forms of market frictions — non-performance, deployment challenges, and others. By reducing barriers and de-risking deployment, insurance and risk transfer solutions play a critical role in accelerating the path from innovation to operation.

The energy transition is among the most complex undertakings of our time. Yet, by driving innovation across the full energy value chain — generation, transmission, usage, and storage — we can build a cleaner, more resilient, and more efficient system for the future.

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Munich Re Ventures (MRV) is the venture capital arm of Munich Re Group, one of the world’s leading providers of reinsurance, primary insurance, and insurance-related risk solutions. With more than $1 billion in assets under management, Munich Re Ventures invests in the most innovative start-ups transforming the future of risk and risk transfer. MRV’s experienced investors are financially-driven while focused on the strategic interests of Munich Re and the broader insurance industry. MRV works closely with Munich Re Group businesses across the globe to fund and partner with the best emerging companies developing new technologies and business models — and risks — for tomorrow’s world.

Insurance was one of the first industries to adopt mainframe computing in the 1960s, and now — six decades on — today’s top 10 insurers all still depend on it. In the age of AI, continued mainframe reliance comes with consequences. This tech debt hinders insurers’ ability to adopt new innovations like open-source technology and GenAI, two technologies that will quickly become table stakes across large enterprises.

Efficient, cloud-based tech infrastructure can transform business outcomes for insurers. BCG found modern IT platforms can drastically improve insurance customer experience, increase revenue by 25%, and help bring products to market 3–5x faster.

But moving off the mainframe is costly, time-consuming, and risky. Credence Research expects insurers in North America, Europe, the Middle East, and Africa will spend between $6.5–10B on IT modernization alone from 2024 to 2026 (this is on top of the significant amount already spent in this regard over the past decade). Beyond the high cost, migrating mission-critical applications to the cloud might also disrupt customer-facing operations.

There’s no guarantee the new systems will function as planned, and indeed, it’s highly probable they won’t — 79% of application modernization projects fail. For insurers, stability, consistency, and compliance are key, and ineffective cloud migration puts these core values at risk.

“Modernizing legacy code is crucial for insurers, but has historically been an expensive, time-intensive, and risky undertaking. De-risking the process is key for industry uptake,” said Martin Thormählen, CTO of Munich Re. “With efficient, modern applications, more insurers will successfully adopt emerging technologies, transforming business outcomes.”

Moving Beyond Mainframes

Mechanical Orchard helps insurers (and other Fortune 500 companies) modernize with confidence. Eschewing decades-long cloud migration projects with uncertain results, the company transforms mainframe applications into modern, cloud-based instances safely, reliably, and faster than traditional methods.

Through an iterative, AI-powered approach, Mechanical Orchard replicates the functionality of legacy systems with production-grade modern applications. This new IT stack improves insurers’ security, ability to innovate, and competitiveness.

We’re proud to join Mechanical Orchard’s Series B alongside Google Ventures and other strong investors. Mechanical Orchard has assembled a team of Silicon Valley veterans, led by CEO and co-founder Rob Mee. In his previous role as the founder and CEO of Pivotal Labs, Rob pioneered agile software development and oversaw the company’s two acquisitions (in 2012 and 2019), plus its spin out and IPO. Co-founder and COO Matthew Work also worked at Pivotal and has led multiple companies through successful exits and an IPO.

Our discussions with the Mechanical Orchard team highlighted their exceptional engineering talent, innovative technology, and proven track record of developing software and services for F500 companies. They’re already on their way, helping several global enterprises start to divest from mainframes, and we’re excited to support them in modernizing the insurance industry next.

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Munich Re Ventures (MRV) is the venture capital arm of Munich Re Group, one of the world’s leading providers of reinsurance, primary insurance, and insurance-related risk solutions. With more than $1 billion in assets under management, Munich Re Ventures invests in the most innovative start-ups transforming the future of risk and risk transfer. MRV’s experienced investors are financially-driven while focused on the strategic interests of Munich Re and the broader insurance industry. MRV works closely with Munich Re Group businesses across the globe to fund and partner with the best emerging companies developing new technologies and business models — and risks — for tomorrow’s world.

Most buildings weren’t built for today’s world. With the average commercial building clocking in at 55 years old, they run on outdated systems, rely on manual oversight, and waste huge amounts of energy. For the real estate industry, that translates to higher costs, increased risk, and difficulty in moving to more efficient operations.

Over the past decade, many startups have tried to reimagine buildings as “self-operating “ — essentially trying to create the Tesla of real estate. But there’s a fundamental mismatch: deploying cutting-edge automation onto decades-old infrastructure is akin to running Tesla’s self-driving software on a 1950s Ford Thunderbird. While the automotive industry designs new vehicles with autonomy in mind, commercial real estate must retrofit outdated systems conceived in an entirely different technological era.

The energy demands of buildings are massive, accounting for 27% of total US energy use, and for many property owners, energy is their largest operating expense. Yet most buildings, especially smaller multifamily and commercial ones, still run on systems that haven’t evolved much since the 1960s and are quite manual, with minimal control capabilities.

While sophisticated building management systems do exist, they are expensive, complex, and typically only viable for large commercial portfolios. That leaves millions of small and mid-sized buildings stuck in an analog era. In fact, only 13% of buildings under 50 thousand square feet have building automation systems yet collectively these buildings account for 44% of the industry’s energy consumption.

The urgency for change has never been greater: energy costs are rising, electrification is accelerating, and building owners need new tools that don’t require full renovation or multi-year payback periods.

The Runwise Solution: Smart Controls That Meet Real World Requirements

We still remember our first conversation with Runwise’s co-founders. They didn’t open with technology or AI — they opened with results: a system that installs in a day, pays for itself in five months, and works across legacy infrastructure without expensive upgrades. In a space crowded with solutions that overpromise and underdeliver, Runwise leads with what owners care about the most: ease, speed and ROI.

That’s exactly how Runwise wins. By turning buildings into smart, software-driven systems, they’re making energy efficiency simple, affordable, and immediately impactful. The company’s AI-powered control platform installs seamlessly across existing infrastructure and begins generating savings from day one. No lengthy integrations. No disruption. Just measurable results.

At first glance, you’d assume the magic is just in the economics — and you wouldn’t be wrong. Already installed in 10,000+ buildings across the US, Runwise combines proprietary wireless chips, hardware, and cloud-based software to optimize heating, cooling, electric, and water systems — cutting usage by up to 30% and reducing install costs by 20 times. But dig deeper, and there’s serious tech underneath.

Runwise’s edge lies in its patent-protected wireless network technology. While competitors rely on lengthy and expensive integrations built upon standard communication protocols, Runwise developed their own mesh network that installs with wireless technology at a fraction of the cost. This patented wireless network ensures 99.99% uptime and a 10+ year battery life, requiring virtually no rewiring or heavy installs. As Lee would say, “No one wants a three-year payback. They want something that works by next quarter.” And that’s precisely what Runwise delivers.

Runwise’s offering doesn’t stop at just energy savings. It also gives operators real-time visibility into critical infrastructure, improves safety through fire and leak detection, and turns reactive maintenance into proactive optimization. And because all new features plug into the same wireless protocol, expanding functionality is as simple as switching on a new service which Runwise has already started to prove out by expanding to other building systems (leaks, fire, smoke and soon, cooling).

For owners of aging buildings (i.e. the majority of U.S. real estate stock), this is a chance to future-proof their assets without tearing down walls. For insurers and infrastructure investors, it’s a clear win on both risk mitigation and efficiency, respectively.

”The lack of building systems and equipment monitoring in aging multi-tenant buildings is a major pain point for many insureds. By monitoring building infrastructure, Runwise’s solution enables a better understanding of building health and a future where failures are identified before they become catastrophic,“ says Stephanie Watkins, Senior Vice President, Global Insurance Innovation Group, at HSB.

The Team Turning Smart Buildings Into a Scalable Reality

Runwise was born from lived experience. Co-founder and CEO Jeff Carleton spent years managing a portfolio of 150 buildings in New York City and couldn’t find a building automation system that worked for his needs. So, he partnered with cofounders Lee Hoffman and Michael Cook to build one from scratch. Today, with over 10,000 buildings using Runwise across the U.S., including major names like Related, Equity Residential, MTA, Port Authority, Rudin, UDR, and 1K+ other operators, they’re proving that their model not only works, but also scales.

With this latest Series B raise, which we’re proud to have joined, the company is doubling down on product innovation, team expansion, as well as entry into new core markets. Runwise is already one of the most widely deployed smart building platforms in the country.

A New Layer of Risk Prevention

Runwise is transforming building management. Their platform doesn’t just reduce costs, it extends asset life, enhances safety, and supports sustainability at scale. For a real estate industry under pressure to modernize, it’s a long-overdue upgrade. For insurers, it offers a new layer of data and control for understanding building risk.

At Munich Re Ventures, we believe Runwise is setting a new standard for how buildings should operate, and we’re excited to help bring that transition to life.

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Munich Re Ventures (MRV) is the venture capital arm of Munich Re Group, one of the world’s leading providers of reinsurance, primary insurance, and insurance-related risk solutions. With more than $1 billion in assets under management, Munich Re Ventures invests in the most innovative start-ups transforming the future of risk and risk transfer. MRV’s experienced investors are financially-driven while focused on the strategic interests of Munich Re and the broader insurance industry. MRV works closely with Munich Re Group businesses across the globe to fund and partner with the best emerging companies developing new technologies and business models — and risks — for tomorrow’s world.

Some moments change everything. The death of a loved one, in particular, stops you in your tracks. Most people don’t know what to do next. That’s where Empathy steps in.

At Munich Re Ventures, we invest in companies offering new answers to the world of risk. Empathy is doing exactly that, building a platform that aids families through some of life’s hardest moments with clarity, guidance, and care.

A Growing Need That’s Still Unmet

The world is aging fast. In 2022, ~10% of the world’s population were over the age of 65, which is only expected to further increase to 16% by 2050. That shift brings with it a massive need for estate planning, grief support, and loss-related logistics. But the current system remains fragmented, typically made up of a maze of small law firms, therapy practices, and funeral homes.

Despite the inevitability of loss, it is often not considered until the time comes, with only about one in four Americans having an estate plan in place. And while some companies have tried to tackle this space directly with consumers, they’ve struggled to get traction because no one wants to download a grief app until they need one.

Life insurers and employers are starting to pay attention. For insurers, supporting beneficiaries at the time of a claim is an opportunity to deliver value beyond just writing a check. For employers, helping employees in a moment of need builds goodwill and reduces absence related to loss. This is the window Empathy has stepped into, and they’ve done it with precision.

“Customer-centric solutions move the life insurance industry forward, and a holistic platform addressing the emotional and logistical needs of beneficiaries during bereavement certainly would meet that critical bar,” shares Holger Reinhold, Head of Business Development at Munich Re’s ERGO. “Comprehensive support is essential for modernizing our service model and demonstrating genuine care.”

Building a Platform for Life

Empathy began with a simple but powerful idea — to support families who shouldn’t have to face loss alone. Their platform brings together funeral planning, estate documents, benefits paperwork, and grief counseling into one intuitive experience that can be embedded into life insurance policies, employee benefits, and more. But what makes Empathy truly stand out is the combination of AI-driven automation with real human care.

Behind the scenes, the tech is doing the heavy lifting, streamlining complex administrative tasks, reducing paperwork, guiding users through legal and financial decisions, and making sure nothing falls through the cracks. For families, it means 24/7 digital support and less time sorting through red tape. For insurers, banks, and employers, it turns a typically fragmented, reactive moment into a more straightforward, supportive experience.

By embedding its services into life insurance policies, employer benefits, and financial institutions, the company meets people where they already are, and offers support the moment it’s needed most. That combination of smart infrastructure and empathetic design is what’s driving deep traction. To date, eight of the top ten US life insurers (among many others) have partnered with Empathy with zero churn, showcasing the product’s fit.

We’re also excited about where Empathy will go next: further expansion, deeper employer partnerships, and policy-level rider integrations are all big opportunities for the company to potentially pursue in the future. We believe a solution like Empathy’s will be able to help in all of life’s difficult moments that bring emotional and administrative burdens.

A Team That Knows How to Build Big

Empathy’s founders, Ron Gura and Yon Bergman, have been building together for over a decade. They’ve scaled teams at eBay and WeWork, launched and exited companies, and earned reputations as founders who attract top-tier talent while executing with heart.

Their vision isn’t just about end-of-life support. It’s about becoming ‘Care OS’, the go-to platform for all of life’s unexpected moments.

We’re proud to be supporting Empathy as part of their Series C. Not just because the business fundamentals are strong but because the mission is urgent, the team is exceptional, and the impact is real.

In the end, it’s not just about reducing the risk but about being there when the risk becomes reality.

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Munich Re Ventures (MRV) is the venture capital arm of Munich Re Group, one of the world’s leading providers of reinsurance, primary insurance, and insurance-related risk solutions. With more than $1 billion in assets under management, Munich Re Ventures invests in the most innovative start-ups transforming the future of risk and risk transfer. MRV’s experienced investors are financially-driven while focused on the strategic interests of Munich Re and the broader insurance industry. MRV works closely with Munich Re Group businesses across the globe to fund and partner with the best emerging companies developing new technologies and business models — and risks — for tomorrow’s world.

By Jacqueline LeSage, Oshri Kaplan, Ian Sanders, and Ben Bergsma

The recent NEXT Insurance acquisition signals a watershed moment for the Insurtech industry, part of a larger trend we at MRV have been anticipating for a while. The $2.6 billion dollar deal clocks in as the largest Insurtech P&C acquisition, setting a new bar for Insurtech valuations across both the challenger and enabler landscape.

Having led NEXT’s Series A round in 2017 and served on the board for six years, we are particularly proud of this development — but beyond the specifics of this deal itself, we now turn our focus to what this augurs for the broader Insurtech market as a whole.

Much ink has been spilled about the disappointing outcomes of the initial “Insurtech 1.0” wave in recent years. Even as the wave of “Insurtech 2.0” players took the lessons of their forebears to heart regarding the importance of underwriting profitability, there remained many questions around if success was possible for the industry — it has been a time defined by skepticism in search of a proof point.

And now, we argue, that proof point has arrived. The NEXT acquisition affirms what we always believed to be true, namely that:

• Insurtechs that marry the discipline and focus required for profitable growth with modern, tech-enabled go-to-market and operations will generate outsize value.
• Insurance incumbents understand the value that this new wave of Insurtech players offers the wider market and are keen to encourage their development and success.
• While most startups don’t work out, a few go on to do great things. Disciplined venture-backed Insurtech challengers have an exit offramp available to them and big outcomes are possible. Our job as venture investors is finding those winners.

What Comes Next

We expect this deal to catalyze expanded interest across the Insurtech landscape, from seed to post-IPO, and from enablers to challengers (more on our perspective on enablers here). This new set of market comps provides Insurtech investors with renewed confidence that the market will reward their convictions. And there are a number of existing late-stage challengers who, learning the lessons of Insurtech 1.0, have been emphasizing profitability and are now contemplating their next step forward.

We’re excited to watch how this tailwind for Insurtech 2.0 ripples through the ecosystem in the coming months and years.

Stay tuned.

—

Munich Re Ventures (MRV) is the venture capital arm of Munich Re Group, one of the world’s leading providers of reinsurance, primary insurance, and insurance-related risk solutions. With more than $1 billion in assets under management, Munich Re Ventures invests in the most innovative start-ups transforming the future of risk and risk transfer. MRV’s experienced investors are financially-driven while focused on the strategic interests of Munich Re and the broader insurance industry. MRV works closely with Munich Re Group businesses across the globe to fund and partner with the best emerging companies developing new technologies and business models — and risks — for tomorrow’s world.

As the venture arm of Munich Re, we invest globally in cutting-edge companies that create, assess, mitigate, or transfer risk.

We asked members of the Munich Re Ventures investment team to share predictions across key investment areas for the year. Here are their responses:

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Insurtech — Ben Bergsma, Principal

Market Momentum — In 2025, the global insurtech space is primed for increased momentum, largely driven by advances in AI and an evolving market landscape. I anticipate that AI will continue to reshape underwriting, risk assessment, and personalized policy offerings, enabling insurers to enhance customer experience and streamline operations.

Additionally, insurtech as a sector will likely see an increase in exits, with opportunities for M&A as incumbents seek innovative solutions, and a potential rise in IPOs as mature insurtechs from around the world finally test the waters after implementing lessons from the insurtech 1.0 wave of public offerings.

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HealthTech — Sidra Ahmed, Director

Data Meets Impact — AI and data-driven insights will play a pivotal role in advancing healthcare by prioritizing robust data infrastructure and interoperability. While automation of repetitive tasks has laid the groundwork, the focus will shift toward achieving clinical impact. A new wave of data infrastructure companies — either novel players or consolidated offerings — will emerge to integrate vast and diverse healthcare datasets.

Overall, the industry will experience increased consolidation as health companies capitalize on dampened valuations amid 2024’s tough fund-raising environment, large acquirer balance sheets, and a more supportive regulatory environment in 2025. M&A will dominate, but will also likely pave the way for broader, integrated offerings for an active public market.

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Cybersecurity — Blake Pennington, Principal

Shades of Gray — While AI may be all the rage, humans will still reign supreme — both as creators of innovative technologies and drivers of risk/risk mitigation. AI will be used to reveal human risk embedded across organizations, providing new insight and meaning to security posture management (applied to your favorite cyber acronym — CSPM, ASPM, DSPM, TBDSPM, etc.) by looking at the social elements that drive culture. This will help answer fundamental questions: is a specific company a security risk because of their cyber culture (or lack thereof)? Is company X riskier than company Y?

These indicators will reveal what we have always known (security is not binary, but rather exists in shades of gray), and will surface what we have yet to demonstrate (the true risk of a company as reflected through the subconscious zeitgeist or culture of an enterprise).

What is a company’s policy about privacy? Do they put a premium on compliance? Do they have good data hygiene and retention practices? Questions that have historically been answered with yes/no can now be answered with nuance, enriched, and contextualized to provide a true inside-out view of the world.

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ClimateTech — Peter Ortez, Principal

Commercialization is the Name of the Game — 2025 is shaping up to be a potential make or break year for ClimateTech. For the past five years, public sentiment and policy have been largely supportive of climate and energy innovation. Landmark legislation in both the US and Europe provided widespread policy support to green initiatives and helped water the seeds of the energy transition.

Now, ClimateTech should prepare for major policy headwinds that may remove many of the subsidies that enable segments of the climate ecosystem to survive until they reach positive economics. This means commercialization will be the name of the game for ClimateTech in 2025. Companies will face renewed pressure to scale and prove they provide net benefits to society beyond just decarbonization.

Opportunities to do so remain widespread — the AI revolution is creating massive demand for power hungry data centers, hurricanes and wildfires are front page news (pushing demand for innovations in climate resilience and adaptation), and increasing need for decentralized production of critical materials and inputs (e.g., steel, cement, copper) will incentivize new processes to more cheaply and efficiently generate these products.

To scale, ClimateTech companies will need later stage and alternative forms of capital. Late-stage investors, both on the debt and equity side, will want to see proof that these companies can generate economics that enable massive returns, and that starts with getting out of the lab and into the open market. Companies that can’t get traction, particularly those that rely on climate-centric regulation, will face a reckoning in 2025, while those that prove they can do things better, cheaper, and greener, will be tremendously successful.

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SpaceTech — Timur Davis, Director

From LEO to GEO with Starship — Two interrelated trends are poised to shape the space industry in 2025: The continued demonstration of heavy-lift launch vehicles (which promise to slash the cost of access to space and enable the deployment of larger, more complex satellites), and renewed focus on Geostationary Earth Orbit (GEO).

Heavy lift rockets such as SpaceX’s Starship and Blue Origin’s New Glenn remain in the testing phase, with their transformative potential not yet commercially realized. Yet, if they deliver on their ambitious promises, these vehicles could reduce launch costs by an order of magnitude, opening the door to more sophisticated, larger-scale payloads. Such a breakthrough would prompt the pendulum of industry focus to swing back from the crowded bustle of Low Earth Orbit (LEO, 200–2,000km above sea level) to the enduring advantages of GEO (36,000km above sea level).

In recent years, LEO has enjoyed a renaissance. Declining costs (albeit for smaller payloads), rapid technological advancements, and miniaturization have fueled the deployment of agile and inexpensive satellites. Startups have rushed to capitalize on the opportunities, revolutionizing satellite services and connectivity in the process.

Nonetheless, GEO remains the backbone of global communications, offering continuous coverage of vast regions of the Earth with far fewer satellites than LEO constellations require. 2025 may witness a resurgence of interest in this higher orbit, spurred by a combination of government investments in critical infrastructure for defense, communications, and private-sector innovation. Drawing lessons from LEO, companies are beginning to design smaller, more cost-efficient, but still robust, GEO satellites. Advances in satellite servicing and life-extension technologies may further tip the balance by mitigating GEO’s traditionally high costs and static designs.

As the space industry matures, the year ahead could mark the dawn of a new chapter. Heavy-lift rockets and advances in satellite technology may converge to enable the deployment of increasingly complex systems across both LEO and GEO, reshaping the architecture of orbital activity.

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Equipment Tech — Jennifer Place, Principal

Policy Impacts Loom Large — As we kick off 2025 it’s impossible to ignore the impact a new administration will have on American manufacturing, and the implications for investments in emerging technology in the equipment tech and industrial sectors. The Inflation Reduction Act committed billions of dollars to accelerate domestic clean energy technologies and manufacturing through a combination of tax incentives, grants and low interest loans.

Under the new administration, we anticipate some of the goals underpinning the IRA will continue to be priorities, with an emphasis on domestic manufacturing and energy independence. However, the training wheels are coming off and the bar will be high for any new technology to compete without relying on tax credits or access to low cost of capital dollars previously afforded by DOE grants and financing programs. Venture capital dollars will be equally discerning, with capital focused on solutions that can compete profitably and be scaled in a capital efficient manner.

As focus shifts toward domestic manufacturing in the US, this will likely take place against a backdrop of continued high interest rates. Manufacturers will look to drive greater efficiency, reliability, and profitability from existing assets. I’m particularly excited about technologies that ensure equipment uptime, improve predictive maintenance, and mitigate the financial impact of rising and volatile energy prices.

Finally, while it is hard to anticipate the full impact of tariffs and a potential trade war, fears have been focused on access to rare earth minerals critical to the production of electronics, vehicles, and countless other industries. Technologies that improve the circularity and recovery of rare earth elements will likely benefit from this uniquely timed macro shift.

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Munich Re Ventures (MRV) is the venture capital arm of Munich Re Group, one of the world’s leading providers of reinsurance, primary insurance, and insurance-related risk solutions. With more than $1 billion in assets under management, Munich Re Ventures invests in the most innovative start-ups transforming the future of risk and risk transfer. MRV’s experienced investors are financially-driven while focused on the strategic interests of Munich Re and the broader insurance industry. MRV works closely with Munich Re Group businesses across the globe to fund and partner with the best emerging companies developing new technologies and business models — and risks — for tomorrow’s world.

The energy value chain — spanning generation, transmission, distribution, storage, and end use — is undergoing significant shifts. From the surge in intermittent energy supplied by renewables to the insatiable demand from data centers, the grid faces mounting pressure to adapt. At Munich Re Ventures, we see immense opportunity in the grid’s transformation.

Power transmission and distribution are critical to the energy system, yet remain mired in outdated technology. Much of today’s infrastructure reflects what existed in the 1950s, with towers, transformers, insulators, and conductors that have seen little technological advancement. Similarly, electrical systems within buildings and industrial centers are equally archaic. This stagnation contrasts sharply with the rapid expansion of renewable energy, industrial electrification, and data center power demand.

“Grid modernization is a critical step in accelerating and de-risking the development of renewables, data centers, and low-carbon infrastructure,” shares Roman Beilhack, Head of New and Green Technologies at Munich Re.

Redefining Power Transmission and Distribution — Outdoors and Indoors

VEIR tackles precisely this challenge — directly addressing the transmission, distribution, and end use segments of the energy value chain. In contrast with traditional copper cables, their high-current superconducting cables offer a transformative solution, transmitting ten times more power than conventional cables at the same voltages.

VEIR is focused on tackling three critical problems: 1) the growing power demands and space constraints of data centers exacerbated by AI’s rise; 2) stranded renewable energy projects and industrial loads unable to connect to the grid; and 3) the grid’s inability to scale and serve accelerating demand.

Enabling Advanced Compute for the Rise of AI

Data center operators, particularly hyperscalers (e.g., Microsoft, Google), face unprecedented power density challenges driven by the rise of AI workloads and the advanced hardware required to support them. Nvidia’s Blackwell platform requires over 100kW of power, a fivefold increase over current GPUs. Traditional copper cables, constrained by low capacity and large voltage drops, are ill-suited to efficiently handle these growing demands.

VEIR’s cables offer superior power capacity, save space, and provide unmatched flexibility in data center design. By delivering more power in a smaller footprint, VEIR enables operators to rethink the design of new-build data centers, retrofit existing facilities to meet surging AI-driven compute demands, and increase compute density to reduce latency.

Unlocking Stranded Renewable Resources and New Industrial Sites

To achieve a decarbonized grid, the deployment of renewable energy must accelerate. However, many of the best solar and wind sites near existing interconnection points with available grid capacity are tapped out. Developers are increasingly forced to consider more remote locations, grappling with onerous permitting requirements for long distribution lines. Over 30% of solar and wind siting applications submitted in the last five years were cancelled, with local ordinances, zoning regulations, and grid interconnection cited as the leading causes.

VEIR’s technology offers a game-changing solution by reducing the physical and visual footprint of interconnection lines. For energy projects under ~250MW, VEIR enables interconnection via distribution lines, which face fewer permitting challenges due to their small size, lower voltage, and ubiquity. By unlocking stranded resources and streamlining project development, VEIR paves the way for greater onshore manufacturing and electrified industrial operations.

Expanding Transmission to Meet Electrification and Decarbonization Goals

The global energy grid must add approximately 5.7 million miles of transmission lines by 2050 — nearly doubling today’s capacity — to meet electrification and climate goals. This expansion will require annual global investment in grid infrastructure to rise from $200 billion in 2024 to an estimated $1 trillion by 2050. Yet, in the US, only 55 miles of new transmission lines were built in 2023. The result is a bottleneck in interconnecting new renewable energy projects, with over 2.6 TW of capacity from clean power projects stalled in interconnection queues. These projects require hundreds of millions of dollars of transmission upgrades, often because the power grid is already strained and unprepared for the growth of non-dispatchable resources.

Traditional transmission expansion faces decade-long timelines entangled in regulatory approvals, local opposition, and political hurdles. Even upgrading existing lines to carry more power requires securing expanded rights-of-way and navigating similar bureaucratic obstacles. VEIR’s superconducting cables offer a high-capacity, low-footprint solution that can deliver ten times the power within existing corridors. By enabling reconductoring of existing lines, VEIR bypasses the need for new rights-of-way, accelerating grid upgrades without the political and logistical challenges of new line development.

Enabling the Energy Transition

From solving the power density challenges of data centers to dramatically expanding grid capacity, VEIR’s superconducting cables represent a step-change improvement over traditional copper cables and are a cornerstone of the future energy system. At Munich Re Ventures, we are thrilled to support VEIR as they redefine what is possible in power transmission and distribution. Their technology is not just a solution to today’s challenges but a vital enabler of tomorrow’s energy transition.

For data center operators, VEIR’s cables mean the ability to redesign footprints and meet rising demand. For industrial users, VEIR unlocks greater flexibility in site selection and faster project timelines. For renewable developers, their solution minimizes delays and lowers costs. For the grid as a whole, they enable a faster, more efficient path to decarbonization.

VEIR is led by CEO Tim Heidel, whose extensive experience in energy infrastructure spans both academia and industry, including his academic work at MIT and leadership roles as Program Director at ARPA-E and Deputy Chief Scientist at NRECA. Supporting Tim is a seasoned management team with deep commercial and product experience, specifically tailored to the energy and utility sectors.

We are thrilled to lead VEIR’s Series B and to support the company as they transform the energy value chain and power a decarbonized future.

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Munich Re Ventures (MRV) is the venture capital arm of Munich Re Group, one of the world’s leading providers of reinsurance, primary insurance, and insurance-related risk solutions. With more than $1 billion in assets under management, Munich Re Ventures invests in the most innovative start-ups transforming the future of risk and risk transfer. MRV’s experienced investors are financially-driven while focused on the strategic interests of Munich Re and the broader insurance industry. MRV works closely with Munich Re Group businesses across the globe to fund and partner with the best emerging companies developing new technologies and business models — and risks — for tomorrow’s world.

Insurtech has been operating alongside the incumbent insurance industry for years now, expanding how IT, AI, and other tech-wide innovations can be applied to the universe of risk mitigation, assessment, and transfer.

A prominent category of these insurtech companies, deemed “challengers,” pair new technologies with insurance products they themselves distribute as MGAs, brokers, or carriers. At Munich Re Ventures (MRV), we were among the earliest investors in the sector, and today we have multiple challengers in our portfolio (including Acko, At-Bay, HDVI, Hippo, ManyPets, and Next Insurance).

Looking beyond the challenger landscape, we believe additional opportunities exist for enabling technologies to form the next major wave of insurtech — companies that sell software, services, and data to the incumbent insurance industry, rather than selling insurance products themselves.

As such, we believe that the next great investment class for insurtech is “enablers”, ie. software players — some purpose-built for insurance, but many not — that power efficiencies and growth for the insurance ecosystem.

A New Insurtech Ecosystem — The Rise of the Enabler Category

While enabler investment has constituted a relatively small portion of the $31.4 billion in insurtech investment since 2019 (representing just $8.3 billion of that total according to our Pitchbook analysis), we now believe it is time to rethink the role of enablers.

In the past, insurance companies relied upon legacy infrastructure, often requiring custom-built solutions and making software integrations, in general, challenging. For enablers, this led to long sales cycles as incumbents simultaneously needed to navigate the technical challenges, as well as be convinced of the role that unfamiliar, cloud-based startups might play in supporting their needs. This obstacle-ridden market dynamic led to few companies innovating in the space and low venture investment.

In recent years, things have shifted dramatically. Insurers collectively went through a digitization process, and this move to the cloud has provided a forcing function to reconsider internal tech stacks and IT infrastructure from top to bottom. As a result of this technology maturation, we are seeing improved appetite from insurance incumbents in working with enablers, with sales cycles condensing as organizations become ever more open and flexible technology buyers.

Beyond this pool of incumbent buyers, there is also a growing cohort of other tech forward insurance companies that are viable customers for enablers, including insurtech MGAs and carriers, private equity backed brokers, and MGA roll-ups. Taken all together, the universe of insurance customers for enabler technology and services is broader and more diverse than ever.

AI is also a notable driving force. Interest in novel technologies has increased, thanks to the rise of widely-publicized GenAI tools — there’s an industry-wide acknowledgement that companies failing to embrace AI will soon fall behind their peers. Within insurance we are seeing the adoption of AI (both as initial pilots and full-scale rollouts) across all areas of the industry — from the operations side through to core businesses such as underwriting.

Our confidence in this assertion is supported by the data: 47% of insurance organizations have invested strategically to integrate AI across core business capabilities and a much higher percentage of insurance firms plan to invest in pricing, analytics, and automation via artificial intelligence in the next three to five years.

Leaning into the potential of new ways that technology can be brought into the insurance fold has the potential to unlock new avenues of VC engagement and bring the enabler ecosystem to the fore.

The Enabler Taxonomy

Many insurers are looking for tools to enhance their workflows and core functions rather than replace them entirely. They value control — modular solutions will likely gain more traction than all-encompassing ones. Some enablers streamline processes company-wide, across departments and workflows, while also going deep into specific insurance needs.

Given this modular approach, we bucket enablers based on where they play in the insurance operation:

• Services, data, and analytics — Address individual process steps for specific pain points in the insurance value chain by targeting inefficiencies or offering additional data sets and analytic capabilities. Data companies that offer unique data sets across lines of business will be better positioned to succeed and attract venture dollars. Additionally, companies that help solve the data and analytics disarray will bring immense value to companies who are trying to reconcile, integrate, and bring more value to partners and customers. ‘Services’ include companies that solve an individual process pain point without changing the process around it. As a whole, the barrier to adoption for these companies is lower, however, they also tend to target a smaller market size.
• Infrastructure — Reduce friction in the insurance process. These providers enhance foundational infrastructure, workflow tools, and connectivity solutions within the broader insurance ecosystem. There is vast potential for solutions that reduce friction in high-touch processes across various insurance verticals and/or business units by automating workflows, which can unlock higher pricing power and expand total addressable markets.
• Core functions — Vertical SaaS providers focusing on key insurance functions. These solutions target critical aspects of the insurance value chain by automating or enhancing existing processes. They encompass everything across the insurance value chain: distribution, product development, pricing, underwriting, payments, claims, and capital management. Scalable solutions that address vertical-specific pain points have the potential for significant value capture in large markets. Early leaders have emerged in pricing, while competition is intensifying in underwriting and policy administration, though there remains considerable room for growth. Differentiated solutions in distribution, payments, and claims still hold untapped potential for expansion.

Enablers that meet these specific needs are already gaining traction in the insurance marketplace. In underwriting, Sixfold maintains a GenAI-first approach that complements and automates the underwriting process. Hyperexponential modernizes how insurers approach pricing, while Reserv is building a digitally-enabled TPA from the ground up. Other enablers leverage AI to tackle distribution challenges: Outmarket uses AI to facilitate risk placements for wholesalers, while Buddy is developing technology that enables insurers to sell any insurance product digitally with ease. And our portfolio company, Flow, uses cutting-edge technology to enhance the wholesale broker ecosystem.

Some enablers do touch on several of these workflows. Artificial Labs supports new underwriting strategies (such as smart follow) while also streamlining internal workflows. Akur8 services pricing and product as well as capital management with end-to-end pricing and actuarial support. Finally, we recently invested in Functional Finance, which has experienced exponential growth with its platform designed to simplify invoicing, premium payments, collections, reconciliation, and more.

Some enablers started with a focus outside of insurance, but later pivoted to expand into the industry once they saw how carriers and brokers embraced their product. We see this with Unqork, for example, which allows companies to quickly create customized no-code cloud infrastructure for internal needs as well as underwriting and bringing new products to market quickly. FintechOS launched targeting the banking industry with financial processing support, but quickly realized their insurance offering gained traction far greater than they expected. Novidea, an IT support platform, didn’t begin in insurance, but the industry is now a key market for the company. Mechanical Orchard uses GenAI to help engineers efficiently migrate legacy architecture to the cloud in a leaner, cleaner format.

This reengagement with the insurance industry extends to incumbent enablers as well, with familiar Enterprise SaaS names such as Stripe and Salesforce sensing the sea change among insurers and acting accordingly. Stripe is working to enter the insurance payments space at the infrastructural level, while Salesforce recently led an investment in the aforementioned GenAI startup, Sixfold, via their venture arm. Enablers of all sizes are now sitting up and taking notice.

And, of course, many more enablers are operating in the insurance space than just those mentioned above. Bottom line: Any company that addresses a core insurance function to support these fundamental business goals has a role to play as an insurtech enabler.

Enablers’ Moment in the Sun

While insurance leaders are now more open to seeking outside solutions, many remain cautious about new technologies and maintain detailed, industry-specific requirements. This push-pull of embracing new opportunities while remaining sensitive to how they engage will define the relationship between enablers and insurance providers for years to come.

For more than a decade, MRV has operated at the intersection of risk and technology — bringing startups and the insurance industry together in partnership. As such, the rise of insurtech enablers is an exciting moment that is very much aligned with the MRV mission. Through our deep relationships with a wide diversity of carriers (both incumbents and challenger insurtechs within our portfolio), we see firsthand how some of these industry players are approaching this new territory. And this is precisely why we believe it’s an exciting time to be a tech enabler of the insurance ecosystem.

If you are a founder thinking of building a software platform for the insurance market, want to expand into the insurance vertical (now or in the future), or have an established platform — reach out! We would love to chat.

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Munich Re Ventures (MRV) is the venture capital arm of Munich Re Group, one of the world’s leading providers of reinsurance, primary insurance, and insurance-related risk solutions. With more than $1 billion in assets under management, Munich Re Ventures invests in the most innovative start-ups transforming the future of risk and risk transfer. MRV’s experienced investors are financially-driven while focused on the strategic interests of Munich Re and the broader insurance industry. MRV works closely with Munich Re Group businesses across the globe to fund and partner with the best emerging companies developing new technologies and business models — and risks — for tomorrow’s world.