Exclusive: Home insurtech Kin reaches $1 billion valuation
Nearly two years after walking away from a SPAC deal, Kin Insurance has raised $33 million in Series D extension funding, bringing its valuation just above $1 billion, the company tells Axios exclusively.
Why it matters: Kin's public market peers — many of which SPACed — have struggled to maintain investor confidence.
Details: The upround for the home insurance company comes from existing investors. QED led with participation from Allegis Capital, Alpha Edison, Geodesic Capital and Hudson Structured Capital Management.
- Kin has been gradually upsizing its Series D war chest since leaving behind its SPAC deal, with the company's prior close valuing the business at around $900 million.
Of note: Following this $33 million infusion, Kin's per-share price remains the same as the prior close, with a rising number of shares outstanding.
- At a time when public and private investors are prioritizing profitability, the company turned its operating income green this year, closing out the first half of 2023 with $13 million (up 288% from the same period a year prior) while gross profit hit $57.1 million (up 58%) on a GAAP basis.
- It expects to maintain EBITDA profitability for the full year, though it has not yet hit that figure on a bottom-line basis.
What they're saying: CEO Sean Harper attributes the company's increased valuation and growth to the company's business model and strategy of gradual expansion.
- Founded in 2016, Kin is live in just seven states. (Hippo's home insurance offering is live in 39, with Lemonade live in 22, plus the District of Columbia.)
- "Every state is regulated differently," Harper says. "Every state has a different type of housing stock, and every state has different data sources with different weather hazards."
- He also ascribes its ability to underwrite in challenging regions like Louisiana and Florida due to granular data on a home's construction and neighborhood.
- This automation-focus lets Kin cut out costly independent agents and brokers.
Zoom in: The company has not been immune to recent market conditions; it laid off 2% of its full-time employees last fall.
What we're watching: Kin plans eventually to go public, though in a significantly different shape from what it looks like now. It wants to be bigger, more diversified and more profitable.
- The company plans to add additional kinds of insurance and expand into five more states next year.
- "Now we're more focused on what in a normal market leads to a successful public company," he says, noting bankers are advising that companies have at least $200 million revenue in today's market. "If I had to guess, I'd say maybe in 2026. Though if the market got really hot, we could potentially go earlier."
The bottom line: Staying off the public market proved to be the right decision for Kin.