Friday,
March 5, 2021

Market recap

Dow Jones

30,924.14

-345.95 (-1.11%)

S&P 500

37,68.47

-51.25 (-1.34%)

Nasdaq

12,723.47

-274.28 (-2.11%)

Amazon

$2,977.57

-$27.43 (-0.91%)

Chipotle

$1,351.12

-$57.10 (-4.05%)

Disney

$188.03

-$4.23 (-2.20%)

Amid evolving news + uncertainty surrounding COVID-19, your financial needs are our top priority. For more information on COVID-19 and your finances click here.

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Top Story

Deliveroo Plans a London IPO

Surging Demand for Food Delivery

Yesterday, Deliveroo announced plans to list its shares in London. The UK-based food delivery company’s IPO is expected to take place later this year.

After almost failing in early 2020, Deliveroo has seen demand for its services surge during the pandemic. Its flagship restaurant food delivery service has seen significant growth, and the company also expanded into grocery delivery and cloud kitchens.

Welcome News for London

Deliveroo has not yet shared pricing information for its IPO. It was recently valued at $7 billion after a $180 million funding round. Amazon (AMZN) has invested in Deliveroo, as have Durable Capital Partners, Fidelity, and T. Rowe Price.

Deliveroo’s decision to list in London is welcome news for the city as it works to attract more growing tech companies to its exchanges post-Brexit. Last month, Amsterdam pulled ahead of London to become the largest share trading capital in Europe. London is now looking for ways to stay competitive with New York, Amsterdam, and other financial hubs.

Changes for the London Stock Market

A government-commissioned review of London’s stock market rules was published earlier this week. It called for allowing dual-class listings and relaxing requirements for SPACs, among other measures. Deliveroo plans to list with a dual-class share structure.

A number of other tech companies, like the fintech firm Wise or cybersecurity provider Darktrace, are reportedly exploring IPOs in London. Earlier this week Trustpilot, the Danish customer reviews platform, announced that it was also considering a London listing. Investors around the world will be watching to see what Deliveroo’s performance could mean for the future of London exchanges.

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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.

Friday Fundings: Instacart, Volocopter, Deliverr

Instacart Doubles its Valuation With New Funding

Instacart, the grocery delivery service, doubled its valuation for the second time since the pandemic began. Earlier this week, the company announced that it raised $265 million in a recent financing round, bringing its valuation to $39 billion. In October of 2020 the company was valued at $17.7 billion.

During the pandemic, millions of people have turned to grocery delivery to reduce their risk of catching COVID-19. Analysts believe that some of them will stick to these habits even when more of the population is vaccinated and it is safer to return to in-person stores. Amidst this growth, Instacart is reportedly making plans to go public.

Volocopter Raises Funds to Build Flying Taxis

Volocopter, a German startup building and testing flying vehicles, raised $241 million in a Series D funding round. A number of financial and strategic backers invested in this round, including funds managed by BlackRock, Atlantia SpA, Avala Capital, and Continental AG.

Within the next two years, the company hopes to have working models of the two vehicles it has been developing. In addition to working on its vehicles, Volocopter has also been developing plans for how its robots could be used as taxis in urban areas.

Deliverr Rides the Ecommerce Wave

Deliverr is a logistics and fulfillment startup which helps smaller companies manage their ecommerce operations. Its clients include the specialty pillow company Huggaroo and a number of famous TikTok personalities. Deliverr currently has 52 warehouses across 17 states.

The company recently raised $170 million in a Series D funding round led by Coatue with participation from Brookfield Technology Partners and Activant Capital. Ecommerce sales have climbed by 44% during the pandemic and many expect they will not slow down in the long term even after consumers can return to brick and mortar stores. Investors believe this means that Deliverr is poised for growth.

Not-So-Breaking News

Financial Planner Tip of the Day

“Working to improve a credit score before applying for a home loan could save a borrower a lot of money in interest over time. Lower rates will keep monthly payments lower or even provide the ability to pay back the loan faster.”

Brian Walsh, CFP® at SoFi

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