Root and Hippo were very much part of the trend that saw several consumer-facing insurance startups going public during the last venture boom, as were MetroMile and Lemonade. Since their IPOs, most of these companies’ track records on the public market have been suboptimal, to put it mildly. The Exchange explores startups, markets and money. Read it every morning on TechCrunch+ or get The Exchange newsletter every Saturday. Valued at around $6.8 billion in its IPO, Root is today worth a mere $67.2 million, per Yahoo Finance. Hippo and MetroMile went the SPAC route, and both saw their values decline precipitously afterwards: Hippo is worth $440 million today compared to its post-combination market cap of more than $5 billion, and MetroMile wound up selling to Lemonade for less than $145 million worth of stock in its new parent company. Not all of this cohort has done poorly, though. Lemonade went public at $29 per share, and its shares are trading at just over $16 today. It’s by far the best performer of the group. Missing Attachment After parsing recent venture data, re-examining venture interest in light of new market conditions, and a number of recent funding rounds, we’ve come to the conclusion that the market for insurance-focused startups is actually not moribund. It’s simply smaller and, perhaps, more intelligently focused than before. Let’s examine.
There’s some bulls in this house
First, we should clarify that the investors we talked to haven’t lost interest in insurtech startups, even when this is only one of several categories their funds invest in. “We are still bullish on insurtech and we have been active in 2023,” said Hélène Falchier, a partner at fintech-focused fund Portage, for example. Yet, the sector hasn’t been spared the devastation caused by the broader downturn. “It’s been a turbulent few months for all tech sectors, including insurtech,” said Stephen Brittain, director and co-founder of Insurtech Gateway.
Despite messy IPOs, there’s good reason to be optimistic about insurtech startups by Anna Heim originally published on TechCrunch