Home insurance startup Hippo has scored the ultimate umbrella policy.
The six-year-old company is set to go public by merging with a blank-check company backed by LinkedIn co-founder Reid Hoffman and Zynga founder Mark Pincus, the Wall Street Journal reported. The SPAC, dubbed Reinvent Technology Partners Z, valued Hippo at $5 billion — nearly five times its valuation in July 2020.
The deal includes a $550 million PIPE, or private investment in a public entity, from investors including Dragoneer, homebuilding giant Lennar, Ribbit Capital and several unnamed mutual funds. Hippo will get $1.2 billion in cash from the IPO.
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Home insurance startup Hippo raises $350M
Based in Palo Alto, California, Hippo was started in 2015 by two Israeli entrepreneurs, CEO Assaf Wand and Eyal Navon. Its underwriting technology uses things like aerial images and building permits to assess the features and conditions of a home. It offers services like water-sensor devices and burglar alarm systems.
“Our guiding principle is that the best claim is one that never happens,” Wand told the Journal.
Hippo was previously valued at $1.5 billion, after raising $150 million in July 2020. Four months later, it closed a $350 million round led by Japanese insurance giant Mitsui Sumitomo. It did not disclose a new valuation at the time.
The booming U.S. housing market and low interest rates have boosted insurtech companies over the past year.
In July, Lemonade’s stock tripled on its first day of trading, boosting its valuation to $3.8 billion.
More recently, insurance startup Rhino, which offers an alternative to security deposits, closed a $95 million round, which it said would be the final one before it goes public.
[WSJ] — E.B. Solomont