In the wake of the insurtech unicorn Root IPO, it can be said for certain that the big deals for the insurance tech startup space have been made for the year.
After all, 2020 was a big year for the broader category, with insurtech markets reaping a lot, rental insurance startup Lemonade Going public, Root herself debuted even more recently in the wake of her auto insurance business, a big turnaround to help Hippo continue building her homeowner business, and more.
The Exchange explores startups, markets and money. Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.But yesterday he brought with him even more news: Metromile, a startup competing in the auto insurance market is going public via a blank check company (SPAC) and Hippo has raised a huge, affordable round.
So let's talk about why Metromile may be present in public markets and why Hippo may have decided to raise more money. Hint: the reasons are related.
A market hungry for growth
Lemonade's IPO was a key moment for neo-insurance startups, a key part of the larger insurtech space. When the rental insurance provider went public, it helped set the tone for public exit ratings for companies of its type: fast-growing insurance companies with clear consumer brands, improving economy, a technology breakthrough, and hard losses. .
For roots, metromils and hippos, it was an important moment.
So when Lemonade increased its IPO range, and then traded sharply higher after its debut, it bode well for its private comps. Not that rental insurance and car insurance or homeowner insurance are the same. They definitely aren't, but Lemonade's IPO proved private investors were right to bet generally on raising startups, because when they hit the IPO ladder, they had something public investors wanted.
