The company says that it focuses on equitable car insurance. Credit: CHUTTERSNAP/Unsplash.

Loop, a US-based auto insurance startup has announced a workforce reduction after failing to secure additional capital.  

Co-founded by John Henry and Carey Anne Nadeau in July 2020, the company says it focuses on equitable car insurance.  

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The news was shared by co-founder and co-CEO Nadeau in a LinkedIn post, revealing the content of the email sent to the affected employees. 

It said the decision was “an absolute last resort” after the failure of the company’s 20-month effort to raise funds, necessitating the layoffs to ensure the startup’s continued operation through its financial struggles. 

“Our last opportunity (which we had shared with you) had an investor pull out in the very final hour, and we just fell short,” Nadeau’s post read.  

“As disappointing as this is, I cannot let our mission die, and see your work not have the impact it deserves. So we have come to this hard decision, that we will continue forward only with a much smaller team and operate our way through this.” 

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The exact number of employees affected by this retrenchment exercise remains undisclosed, but the impact has been felt across various departments, including insurance agents, customer care, data analytics, marketing, software engineering, and product teams, according to a LinkedIn post by a former Loop employee.  

Loop, headquartered in Austin, Texas, has seen several rounds of staff cuts.  

In December 2022, Loop raised $21m in Series A fundraise.  

This round was co-led by Foundry Group and 01A, with additional contribution from existing investors such as Freestyle VC, Blue Fog, Uprising Ventures, and Concrete Rose.  

New investments came from New Voices Fund and Earn Your Leisure, with rap icon Nas also contributing. 

The Series A investment followed a $3.25m seed financing round, led by Freestyle VC.