Home-insurance technology upstart Hippo Enterprises Inc. is teaming with a special-purpose acquisition company to go public, the latest insuretech business to tap equity markets and challenge traditional insurers head-on.
The six-year-old Hippo, based in Palo Alto, Calif., will go public through a merger with Reinvent Technology Partners Z in a deal that values the firm at $5 billion, the companies said. Reinvent Technology Partners Z had an initial public offering of stock in November.
Reinvent’s co-directors are LinkedIn co-founder Reid Hoffman and Mark Pincus, founder of mobile-game maker Zynga Inc.
Hippo’s move will provide funding as it continues a transition from being a partner to insurance carriers that provides a digital-sales channel for them to being both a partner and a direct competitor. Last year, the company bought Spinnaker Insurance Co., a property-casualty insurer licensed in 50 states, and it aims to ramp up the number of policies it issues.
To size up risk in homes, Hippo’s online underwriting technology uses aerial imagery to assess roof conditions and uses building permits to provide details of home features, for instance.