Insurance Startup Hippo Plans an IPO
Hippo Will Merge With Reinvent Technology Partners Z
Home insurance startup Hippo is making plans to go public by merging with the SPAC, Reinvent Technology Partners Z (RTPZ). The deal values Hippo at $5 billion. Reinvent is co-directed by Reid Hoffman, the co-founder of LinkedIn (MSFT), and Mark Pincus, who founded the mobile-game company, Zynga (ZNGA).
Hippo will be the latest of several insurtech companies to go public over the past year. Lemonade (LMND), another insurance startup, had a blockbuster IPO over the summer, gaining 140% on its first trading day. The company’s shares have been somewhat volatile since then, but have climbed overall.
Focusing on the Home Insurance Market
Hippo is largely focused on the home insurance market, which was worth $104 billion in the US in 2019.
Hippo provides customers with proactive insurance services to help them avoid claims. These include burglar-alarm systems and water-sensor devices to catch leaks before they cause damage. “Our guiding principle is that the best claim is one that never happens,” explained the company’s CEO and co-founder, Assaf Wand.
Hippo’s Plans Going Forward
With the funding from its IPO, Hippo plans to transition from being mainly a partner to insurance carriers to becoming a carrier itself. This move will create more revenue potential, but is also more capital-intensive.
The pandemic has caused a boom in demand for housing, with many people buying homes for the first time. If this trend continues, Hippo could be well-positioned for growth.
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