Insurtech: A lot of cash, little love: This is the story of an insurtech company. What happens when the market gives you tons of money and then takes your money?Hippo started trading earlier this week, after it completed its SPAC combination. Hippo, a U.S.-focused neoinsurance provider, initially stayed close to the $10 per-share price of its pre-combination price. However, it dropped yesterday during regular trading.Hippos' declines don't appear to be its fault. Lemonade, another U.S. Neoinsurance player, although one that focuses more on rental coverage, posted slightly better Q2 results than expected earlier in the week. Lemonades' value fell sharply after the report and Hippo seems to have been dragged down by it.The Exchange explores markets, startups, and money.It's available every morning at Extra Crunch. You can also subscribe to The Exchange newsletter every Saturday.While the volatility in trading is fascinating on its own, it is important to note that several neoinsurance firms have seen their value drop as part of a wider trend. It is not surprising that the market has been negatively pricing tech-enabled insurers in recent quarters. This can be a difficult situation for a category which previously enjoyed a lot of attention from investors.We would typically use this time to riff on the current values of public neoinsurance firms and then use that data for a guess as to what price drops might mean for related startups. This column is known for its national pastime: Using public-market data to better understand private market dynamics.Today? Instead, we will be looking at an interesting dynamic among Neoinsurance companies that could have a greater impact on our understanding of private markets. The players we are able to identify and track in this space are generally both market-sentiment-rich and cash-rich.While public markets are reducing the value of neoinsurance stock, the companies that are behind these valuation drops are quite wealthy. Their enterprise values are lower than you might think based on a quick glance at the market cap figures. Lemonade and Hippo care about whether the stock market determines that their businesses are worth minus or plus 10% every quarter? Are they able to continue their long-term visions?Let's look at the numbers and discuss the interview The Exchange conducted with Hippo CEO Assaf Wad earlier in the week. Also, let's consider what Lemonade said during the earnings call.
