Hippo to go public after SPAC merger

(Bloomberg) -- Hippo Enterprises Inc., a home-insurance startup, agreed to go public through a merger with Reinvent Technology Partners Z, a special purpose acquisition company that counts Zynga Inc. founder Mark Pincus and LinkedIn co-founder Reid Hoffman as its lead directors.

The deal values the combined entity at $5 billion, the companies said Thursday in a regulatory filing. Reinvent Technology Partners Z will be renamed Hippo Holdings Inc.

The transaction will allow Hippo to trade publicly after years of expanding throughout the U.S. and snapping up a home-maintenance platform and an insurance carrier. Hippo, led by Chief Executive Officer Assaf Wand raised capital last July in an investment that valued the company at $1.5 billion.

Hippo is one of the latest insurance-techs to use a SPAC to go public. Metromile Inc., which allows customers to pay for car insurance on a per-mile basis, agreed in November to go public through a merger with a SPAC called Insu Acquisition Corp. II.

Hippo’s strategy as an insurtech has been to dig even deeper into the home-insurance market, a sector that totaled $104 billion in the U.S. in 2019, even as other insurance startups such as Lemonade Inc. have expanded from products such as renters’ policies to life insurance. Hippo struck a deal for an insurance carrier, Spinnaker Insurance Co., last year and bought a home-maintenance platform called Sheltr in 2019 to help customers do routine checkups.