December 2, 2023

it’s no surprise Learned that former scooter unicorn Bird is seeking a reverse stock split. The company isn’t breaking new ground here — it’s not the only tech company to bolster its stake with an IPO over the past few years in hopes of keeping the stock above $1 to avoid delisting.root insurance did the same last august. as made a hippopotamusanother former insurtech startup.

Root and Hippo, like MetroMile and Lemonade, saw several consumer-facing insurance startups go public during the last venture capital boom. Since their IPOs, most of these companies have had, to put it mildly, a suboptimal track record in the public markets.

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Root was valued at about $6.8 billion at the time of its IPO, according to Yahoo Finance, and is now worth just $67.2 million. Hippo and MetroMile enter SPAC routethe value of both companies has since fallen precipitously: Hippo is worth $440 million today, compared with a combined market capitalization of more than $5 billion, while MetroMile ended up selling shares of its new parent company for less than $145 million. Sold to Lemonade.

Not all of this group fared well, though. Lemonade went public at $29 a share and is currently trading at just over $16. It is by far the best performer of the group.

But insurtech has held on, even as the carnage stubbornly shows some signs of life. Earlier this year, Duck Creek, which makes enterprise software for insurance companies, was taken private by private equity firm Vista Equity Partners in a $2.6 billion deal. And, just a few months ago, TechCrunch+ spoke to half a dozen investors in the insurtech space, who shared a lot of their thoughts on where tech can cross-profit with the larger insurance market.

After analyzing recent venture data, revisiting VC interest in light of new market conditions, and recent funding rounds, we concluded that the market for insurance-focused startups is not actually dead. It’s just smaller and maybe smarter than before. Let’s check it out.

there are some bulls in this house

First, we should clarify that the investors we spoke with haven’t lost interest in insurtech startups, even if it’s just one of several categories their funds invest in. “We’re still bullish on insurtech, we’ve been active in 2023,” said Hélène Falchier, partner at fintech-focused fund Portage, for example.

However, the industry has not been immune to the devastation wrought by the broader recession. “It’s been a tumultuous few months for the entire tech industry, including insurtech,” said Stephen Britton, director and co-founder of Insurtech Gateway.