FinTech: Hippo, The Home Insurance Unicorn, Raises $150M

July 22, 2020 | FinTech, News, Venture Capital
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Hippo’s latest funding round values it at $1.5 billion.

Insurtech startup Hippo, which specializes in digital insurance of homes and possessions, announced Tuesday its successful Series E funding of $150 million. The round valued Hippo at $1.5 billion post-money. Its aggregate funding since its launch in 2015 is $359 million. (HousingWire(HW))

Investors in the round include FinTLV, Ribbit Capital, Dragoneer, Innovius Capital, BOND, Comcast Ventures, Felicis Ventures, Fifth Wall, Horizons Ventures, ICONIQ Capital, Lennar Corporation, Pipeline Capital, Propel Venture Partners, RPM Ventures, Standard Industries, and Zeev Ventures. Large international hedge funds and family offices also chipped in.

Did Lemonade give a fillip?

Hippo’s rival and property and casualty insurer Lemonade Inc. (NYSE: LMND) issued shares in its IPO at $29. The shares commenced trading on July 2, and are now trading at $80.85, delivering a gain of about 179% on the IPO price.

SoftBank-backed Lemonade’s bumper listing gains may have had a salutary effect on Hippo’s funding and valuation.

Further, a sharp fall in home mortgage rates has triggered a spike in home sales, with a resulting higher demand for Hippo’s insurance policies.

Use of funds

Hippo will use the Series E money for additional hiring, boost its technology, and on a plan to acquire a national insurance carrier.

It plans to reach its products to 95% of U.S. homeowners within the coming year.

Growth, helped by the pandemic

In the past 12 months, Hippo boosted its premium revenue to $270 million, growing at 140 percent YoY.

Further, the insurtech reported a 60 percent increase in sales YoY in Q2 2020, as homeowners sheltered in place and found new ways to use their properties.

A similar, pandemic-related surge in business was reported halfway around the world by PolicyBazaar, India’s digital insurance marketplace. The COVID-19 pandemic triggered a surge in demand for insurance on the Softbank-backed platform. As a result, year-on-year growth at PolicyBazaar this year is running at between 70% and 100% depending on the product.

The Indian fintech and startup is likely to wrap up a pre-IPO funding round of $250 million in the coming weeks. Yashish Dahiya, co-founder, said he plans a $500 million IPO in 2021.

Hippo’s IPO

Meanwhile, Chief Executive Officer Assaf Wand told Bloomberg that Hippo is preparing for an IPO in 2021.

Hippo has set a goal to be profitable next year when it is likely to post revenues of $100 million.

Related Story:  Indian Insurance Marketplace PolicyBazaar Plans $500M IPO                                                 

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