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Policygenius pushes out its IPO plans

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Mar 18, 2022
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Illustration: Brendan Lynch/Axios

Policygenius, a kind of NerdWallet for the insurance industry, said it raised $125 million in Series E funding.

  • The company didn't disclose its valuation, though CEO Jennifer Fitzgerald tells Axios it is an upround with clean terms. The company was last valued at around $500 million.

Why it matters: The funding round shows that investors are still seeing value in parts of the insurtech space, which has been battered so far this year.

  • Existing investors that participated included KKR, Norwest Ventures Partners, and Revolution Ventures.
  • New investors Brighthouse Financial, Global Atlantic Financial Group, iA Financial Group, Lincoln Financial, and Pacific Life made up the majority of the round.

What they're saying: "... we believe that by analyzing these companies’ varying unit economics, investors can understand value differentials and identify potential opportunities among the group," a William Blair insurtech note said this week.

  • The note placed public insurtechs like Hagerty (4.7x), Kin (4.4x), and Goosehead (3.1x) on the better performing side, and noted companies like Lemonade (0.7x), Metromile (0.1x), and ROOT (0x) as underperformers.

Of note: Many of the insurtechs that have struggled after going public, like Hippo and Lemonade, are seeking to be the consumer-facing carriers. Policygenius, however, is a distributor, allowing consumers to compare carriers.

Zoom in: For Policygenius, this funding round is also about staying safe in the private markets, which remain disconnected from the public.

  • The company was considering a SPAC or an IPO last summer, but opted to raise more private capital instead when the conditions grew shaky in the third quarter.
  •  “We decided it was probably better just to raise more private capital to give us runway if and when the IPO opportunity arises,” Fitzgerald says.
  • The question is timing. Bankers, she says, have optimistically suggested the window will open in the second half of the year, though she is also not opposed to merging or selling to another company.
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