Hippo Enterprises is set to go public through a $5bn merger with Reinvent Technology Partners Z, a special purpose acquisition company.
This deal comes at a time when the Covid-19 pandemic has compelled insurance sector to depend on technology to reach out to customers, reported Reuters.
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Set up in 2015, California-based Hippo sells homeowners insurance online.
The merged entity is expected to have around $1.2bn in cash at closing, including up to around $230m of cash held in Reinvent’s trust account from its IPO on 23 November 2020.
The deal is further supported by a $550m PIPE at $10 per share that was led by present investors, mutual funds and Reinvent Capital.
Currently, home insurance products provided through Hippo Insurance Services are available in 32 US states, and cover over 70% of the US population.
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By GlobalDataHippo expects its products to be available to 95% of the US population by the end of this year.
The deal was unanimously approved by the boards of directors of both Hippo and Reinvent.
It is expected to complete in mid-2021, subject to the satisfaction of customary closing conditions.
Hippo CEO and co-founder Assaf Wand said: “Through this strategic partnership with Reinvent and an incredible team of world-class entrepreneurs, investors, and employees, we can’t wait to transform the homeowner experience and accelerate our growth.”
Reinvent co-lead director Reid Hoffman said: “Guided by Assaf’s visionary leadership, Hippo is deploying impressive speed and skill to transform the home insurance industry. Hippo has created its own industry category by rewriting the homeowner experience through insurance.
“Reinvent’s goal has been to help build industry-leading technology companies at scale for the long-term, and we see ample opportunity to ignite growth and scale Hippo’s business; we believe that Hippo is defining a model that will set the path for years to come in home insurance.
“With its differentiated technology, insurance expertise, and vertical integration of homeowner services, Hippo fits squarely into our ‘venture capital at scale’ approach. Together, we will strive to create truly revolutionary outcomes for homeowners and this industry.”
