SUBSPAC

Hippo 🦛 a company that’s Reinventing Insurance

The Rundown (2/7/21)

Welcome to The Rundown! Each week we’ll feature a couple talented guest writers to give their thoughts on whatever is happening in the markets right now.

One of our guest writers this week is the King Tut! He’ll be sharing his thoughts about Hippo – a new insurance company that is merging with the SPAC Reinvent Technology Partners $RTP.


https://twitter.com/kingtutspacs/status/1358117510630019073

The Breakdown

  • Hippo was founded in 2015 by Assaf Wand, an ex-McKinsey consultant and Eyal Navon, serial entreprenuer and software engineer. Wand’s interest in insurance was inspired by his father’s lengthy career in the “antiquated” insurance industry.

  • After two years of R&D, fundraising, and product development, Hippo launched in April 2017 in California. The company’s marketing was centered on the delivery of a 60-sec quote for insurance policies, transparent process, and smart home integration.

  • By March 2019, with Hippo insurance available to more than 50% of the homeowners in the US, the company reported a 25% month-over-month sales growth and total insured property value of more than $50 billion, with a 93% customer retention rate.

  • Hippo is going after a slightly different market. Most of the new insurance companies have pitched services to renters and city dwellers made up of the mostly millennial demographic, while Hippo is aiming its services squarely at homeowners.

  • Hippo not only uses its technology to optimize pricing for potential policyholders, but offers tech-enabled devices like leak detectors & other IOT tools to monitor homes and ensure their upkeep. They also use thermal & satellite imagery to help track changes to properties.

  • Their 60-second quoting application is a drastic improvement over industry giants like State Farm, Liberty, Geico, which can require 126 questions to get a quote. Hippo offers a more comprehensive package than most standard home insurance policies.

  • While Hippo offers features to its coverage that are hard to find, it currently only provides insurance in 31 states. Among the states not covered are Florida, Louisiana, New York, and Oklahoma. More room for further growth!

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  • November 2020: “The opportunities that stand before us are so vast and so big we wanted to double down,” said co-founder and CEO Assaf Wand.

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The Growth

  • Hippo’s growth has been explosive over the past two years, which is seen from the fundraising rounds they’ve held.

    Nov 2018: Hippo raised $70m
    July 2019: Hippo raised $100m
    July 2020: Hippo raised $150m
    Nov 2020: Hippo raised $350m

  • Hippo intends to use the latest round of fundraising (+ going public) to roll out in new states, helping Hippo get to its goal of reaching 95 percent of U.S. homeowners in 2021. They currently offer insurance products to more than 70 percent of homeowners in the country.

  • Hippo’s investors include: FinTLV Ventures, Ribbit, Dragoneer, Innovius Capital, Bond, Comcast Ventures, Felicis Ventures, Fifth Wall, Horizons Ventures, ICONIQ, Lennar Corp., Pipeline Capital, Propel Venture Partners, RPM Ventures, Standard Industries and Zeev Ventures.

  • The company has been doing heavy M&A/partnerships activity in 2019/20.

    June 2019: Hippo Partners with Xfinity to Expand Reach Across the U.S.

  • The company has been doing heavy M&A/partnerships activity in 2019/20.

    Nov 2019: Hippo acquired Sheltr to to beef up its digital home insurance services for clients, with Sheltr’s enabled services designed to provide home wellness checkups.

  • March 2020: Hippo and SimpliSafe announced a partnership that will provide homeowners more options when it comes to protecting their homes to include professionally monitored devices from SimpliSafe, which protects more than 3 million people today.

  • June 2020: Hippo acquired Spinnaker Insurance to expand the geographical reach of its modern home insurance policies, which also include smart home monitoring kits.

  • Nov 2020: Hippo partners with Kangaroo to provide home security options. The partnership expands the suite of smart device kits available within Hippo’s smart home program to include a self-monitored smart home security kit from Kangaroo.

  • Nov 2020: Hippo partners with Sumitomo Mitsui (Japanese insurance giant). Sumitomo Mitsui is looking to tap the “insurtech” startup’s expertise in artificial intelligence to help policyholders minimize damages from fires and other disasters.

  • Hippo CEO: More Than Just Insurance, We Want To Be The ‘1-800 Number’ For The Home “Looking ahead for 2021, Wand said, Hippo will “deepen” its presence inside the home, with an eye, perhaps, on appliance warranties and even payments.”

The Awards & Accolades

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The Competition

  • Hippo vs Lemonade $LMND – Gross written premium in 2019 (the value of insurance products sold, before certain deductions)

    Hippo: $270 million (140% increase)
    Lemonade: $116 million (148% increase)

  • Hippo is on track reach over $100 million in revenue in the next year.
    Lemonade 2020 Q3 Earnings: Expecting revenues of 91-93M$ and negative income

  • $LMND = $144 (MC $8.7bn)
    $ROOT = $22 (MC 5.46bn)
    $RTP = $13 (MC ????)

    This article breaks down the competition quite well between Hippo, Lemonade $LMND, and Root $ROOT

The Conclusion

Hippo isn’t just an insurance company, it’s the all inclusive home platform that connects everything. Insurance is just the way to get in/connected. Reid Hoffman isn’t an insurance guy, he builds new markets and finds verticals to scale even further.


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There’s No I In Trade

My goal is to create a community where people can educate themselves through the world of investing. I can’t do that alone, we need to build this community together. So tell me what you’re loving, tell me what you want to see more of tomorrow.

Disclaimer: This is not financial advice and should not be interpreted as such. I am not a financial advisor. I may currently own or have owned many of the SPACs mentioned above – but that does not mean I am invested now. My investing method is highly risky swing trading which means I am constantly in and out of positions. Please do your own research or hit up the #SPACsquad on Twitter to learn more about SPACs.

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