Lately, we have spent a lot time wondering what is going on with the valuations for insurtech startups that went public within the past year. Remember that we are talking about neoinsurance providers such as MetroMile or Hippo and not insurtech marketplaces such as Insurify and Zebra.
Insurtech exits were plentiful in 2020 and 2021. MetroMile, Hippo and Root went public after Lemonades' firecracker IPO. We have seen their valuations fall significantly since those initial public offerings.
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Oscar Health was not included in the larger space analysis. A shareholder pointed out to The Exchange that it was too early to ask what investors thought when Oscar went public. We agreed. Oscar Health was priced at between $32 and $34, which gave it a life expectancy of $39 per share.
Today's price is $13.58 per share
It could be called another data point in our larger analysis. But Oscar Health adds to the number of insurance types startups have tackled, scaled and went public. Then again, investors are not always a fan of Oscar Health. We are looking at a variety of industries. These include auto insurance (Root and MetroMile), home and rental insurances (Hippo and Lemonade), as well as health insurance thanks to Oscar Health. All of them are taking a beating by the market.
Why? It's a simple question, but I believe I have it figured out. A CEO of a niche neoinsurance firm spoke to The Exchange about a hypothesis that made a lot of sense.
Show me the money metrics
John Swigart, Pie Insurance's co-founder and CEO, was my conversation last week. Pie sells insurance that is SMB-focused, with a special focus on workers compensation coverage. Swigart believes that small businesses are often underserved and overcharged for insurance. His company can provide coverage for smaller businesses than traditional insurance providers, at a lower price point, and with a little bit of technology.
Pie raised $118 million Series C capital in March. Crunchbase has accumulated $306 million external capital. We'll talk more about Pie later.
Swigart's answer to my question about the public insurtech share price fluctuations is what matters most for us. Because he is currently building a similar company, I was hoping he would be up to speed and give me a take. He did.
