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Hippo, an insurtech startup focused on providing home insurance digitally, announced this morning a massive $150 million Series E round at a post-money valuation of $1.5 billion.
With the latest round, the Palo Alto-based company has now raised a total of $359 million since its 2015 inception. Hippo reached unicorn status ($1 billion valuation) in July 2019 with a $100 million Series D fundraise.
The latest financing was oversubscribed and included participation from new investors FinTLV, Ribbit Capital, Dragoneer and Innovius Capital, as well as “significant” participation from existing backers, according to the company.
In the past 12 months, Hippo said it has grown its total written premiums by 140% year over year to $270 million. CEO and Co-founder Assaf Wand told Bloomberg that the company is currently on track to reach over $100 million in revenue in the next year.
Hippo began selling its policies to homeowners in 2017. It initially rolled out in California and now claims to be available to more than 70% of U.S. homeowners across 29 states. The company has since expanded its product portfolio with products for landlords, available in nearly 15 states, and a product for new construction, which is available in 12 states. Today, it has “hundreds of thousands of customers” across the U.S.
The company said it experienced a 60% year-over-year increase in sales in the second quarter “as homeowners shelter in place and find new ways to use their properties.” Over the past five months, its new home maintenance group, Hippo Home Care, has provided free virtual tele-maintenance services.
The startup said it plans to use its new capital mainly to accelerate its expansion, with the goal of reaching 95% of the U.S. homeowner population in the next 12 months. That will include “aggressive” hiring, investing in its technology and to support Hippo’s proposed acquisition, pending regulatory approval, of Spinnaker Insurance Company.
Besides its Palo Alto headquarters, Hippo also has offices in Austin and Dallas. It currently has 280 employees and has plans to add 100 more in 2020 with plans to build a new campus in Austin, Texas, according to Wand. Construction of the facility, which will hold up to 310 Hippo employees when it opens next year, is underway.
Hippo differentiates itself from other home insurers, it says, by providing “more accurate and affordable coverage by using technology and data integrations to develop a unique profile of a customer’s property during the onboarding process.” The company actively reviews changes to a customer’s property over time, using thermal and satellite imagery and layers in AI, machine learning and public records.
Hippo also has a smart home program, which offers eligible customers complimentary smart home devices at sign-up. The company says it has delivered more than 400,000 devices to date and helps alert homeowners to potential issues such as water leaks. When things do go wrong, Hippo says its claim process “leverages highly vetted contractors.”
Gil Arazi, founder and managing partner of insurtech-focused VC fund FinTLV, believes Hippo has transformed the home insurance experience with its proprietary underwriting technology and “delightfully refreshing customer experience.”
“The value Hippo provides for consumers and the strides it has made towards the larger progression of the P&C insurance sector makes it the most compelling technology insurance company of its time,” he said in a written statement.
Hippo allows homeowners to get a quote and purchase home insurance online in 60 seconds or less, save up to 25% compared to traditional insurers, and obtain “smarter coverage for modern households,” according to the company.
It also offers direct integrations into loan origination systems and point of sale systems to allow borrowers to obtain homeowners insurance as part of the mortgage process.
“We work with various partners to capture homeowners’ attention along their home purchase journey – including builders, real estate agents, mortgage lenders – to integrate the Hippo Home Insurance offer when buyers need it most, during closing,” Wand told HousingWire. “Through these partnerships, we’ve created dedicated product experiences to integrate Hippo home insurance at the time of purchasing a home.”
No doubt the insurtech space is a hot one. Earlier this month, digital insurance startup Lemonade went public, with shares soaring more than 136% in the company’s market debut.
Lemonade is licensed as a property and casualty insurance carrier, and began offering homeowners and renters’ insurance in New York in late 2016. That offering is now available for most of the U.S. population. The company says it powers its offerings with artificial intelligence and “behavioral economics.”
Lemonade claims it’s built a system that “collects 100x more data than traditional carriers,” giving it the ability to generate predictive data that it says can help improve underwriting and pricing.
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