The dismal overall performance of SPACs also has affected Hippo. (Lemonade ended up buying Metromile for less than $145 million.) Lemonade, Root, and Oscar went public with IPOs, while Hippo and MetroMile used SPACs. Oscar offers health insurance and is down about 75%. Root, which provides car insurance, is off 77% from its first-day close. Lemonade soared 139% in its first day of trading in 2020 but has dropped by nearly 74% since then, closing Tuesday at $18.13. For example, Lemonade targets millennials with renters, pet, car, and term life insurance. Many have underperformed in the public markets. Each offers different products to different subsets of the sector. Several insurtechs went public in 20, including Lemonade, Root, Oscar, and MetroMile. Hippo has suffered from an “insurtech broad brush,” McCathron said. “We have plenty of capital to weather the macroeconomic storm,” McCathron added. The company raised $1 billion from its SPAC merger, which included a private investment in a public entity, or PIPE, and a convertible note. Hippo also offers customers an assessment of their home health risks as well as a home maintenance checklist. The company offers home protection insurance and technology that links up with smart home devices that Hippo’s partners provide to consumers. “We would have done better with a traditional IPO,” Rick McCathron, Hippo’s president and CEO, told Fortune.įounded in 2015, Hippo is one of several insurtechs that sought to disrupt the insurance industry, which has lagged in adopting technology. A company spokesperson told Fortune the firm’s overall valuation wasn’t affected. 19 announced a 1-for-25 reverse stock split-shares were trading for less than $1- and completed it 10 days later. But its valuation has fallen by nearly 93% to $353.6 million. Hippo on Sept. Unlike shares of many SPAC combinations, or de-mergers, Hippo is trading above its $10 original offer price, closing Tuesday at $15.20. Hippo completed its combination with Reinvent Technology Partners Z on Aug. The Securities and Exchange Commission has also increased oversight of the sector, proposing a sweeping set of rules in March that would effectively even the playing field among IPOs and SPACs, Fortune reported. The SPAC euphoria came to a brutal halt in 2022 when a broad market downturn resulted in fewer IPOs. Companies using SPACs could also provide future guidance, which is not allowed with traditional offerings. Merging with a SPAC was believed to be a quicker, and cheaper, route to public markets compared with a traditional IPO. SPACs, at the time, were wildly popular due to the advantages promised by blank-check companies. Hippo was valued at $5 billion in March 2021 when it announced its combination with Reinvent Technology Partners Z, a SPAC backed by Reid Hoffman, cofounder of LinkedIn, and Mark Pincus, founder of Zynga.
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