Understanding Hippo’s valuation in a post-Lemonade IPO world

Are public markets frothier than today's private markets?

Startups that fit under the broad umbrella of insurance technology are having quite a year.

In early 2020, insurtech marketplaces raised hundreds of millions of dollars, and as the year continued, more insurtech startups saw their fortunes rise. But these busy and lucrative recent quarters are perhaps best demonstrated by Lemonade’s IPO.

The rental and home-insurance startup went public in early July, pricing at $29 per share ahead of its raised IPO range, which valued it at around $1.6 billion.

Despite a strong IPO pricing run, Lemonade was still worth less than the $2 billion valuation it had previously earned from private investors. The debut looked like an example of public markets taking a bite out of private investor enthusiasm, a cooling off for a hot startup.

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But when Lemonade began to trade, its shares soared 139% on their first day, closing at $69.41 per share and valuing the company far above its final private price. No matter what price bankers and institutional investors had managed to agree on, the investing public had quickly repriced the company for a multiple of its IPO price.

Today, Lemonade is worth $78.50, or around $4.31 billion, according to Google Finance.

This week, fellow insurance-selling insurtech player Hippo announced that it had raised a Series E worth $150 million at a $1.5 billion post-money valuation.

But while the moment appeared laudable, Hippo also announced that it had gross written premium — the value of insurance products sold, before certain deductions — of $270 million in the preceding 12 months, a figure that had grown 140% over the prior year.

Lemonade, in contrast, had gross written premium of $116 million in 2019, up around 147% from its 2018 result, and $38 million in Q1 2020, putting it on an annualized pace of $152 million at the end of March. It was worth $1.6 billion at IPO, and north of $4 billion today. The mismatch in the size and value of the companies was interesting to say the least.

To explore both Hippo’s round and the apparent pricing discrepancy between this private firm and the public Lemonade, The Exchange got on the phone with Hippo’s CEO Assaf Wand to dig in.

Are the public markets too frothy? Are private investors too conservative? Both? Let’s find out.


Hippo offers homeowners’ insurance, which Lemonade also offers, though the latter has a historical focus on renters’ insurance. Regardless, the firms are sufficiently related to warrant comparison.

TechCrunch spoke with Wand about his round, learning that it was raised during COVID-19, which meant that some VCs were effectively offline, or tending to their own portfolio companies. Still, after fundraising over Zoom, Hippo and Wand aligned terms, investors and valuation in a way that it felt made sense and put the capital together.