Hippo Insurance has acquired an early-stage startup designed to beef up its digital home insurance services for clients.
The InsurTech startup and managing general agent said it snatched up Sheltr, a San Francisco-based tech-enabled services startup designed to provide home wellness checkups. The cash and stock deal adds Sheltr’s eight employees to the 200-plus already working for Hippo, which declined to disclose the specific price it paid.
Assaf Wand, Hippo’s co-founder and CEO, explained to Carrier Management that Hippo has been looking at several targeted acquisition opportunities in recent months. He said that Sheltr stood above the rest because it fit into Hippo’s overall strategy and offerings.
“We just felt it was the right thing for our company,” Wand said.
What Hippo is getting: A startup that launched only in 2018, and raised its first $3.2 million in seed financing in May 2019. Sheltr co-founder Andrew Wynn describes it as a home maintenance software company that lets Sheltr members schedule and pay for twice annual home checkups performed by “trained and trusted” home professionals. They conduct preventative maintenance tasks such as replacing furnace filters and changing smoke and carbon monoxide detector batteries, and also do tech-driven home assessments that catalog appliances, monitor a home’s exterior condition and give proactive recommendations for home services.
Wynn, who is now Hippo’s director of home services, noted that his company had worked with Hippo and others since its founding, including homeowners, brokerages and other InsurTechs. While startups typically aren’t sold so soon in their life cycle, Wynn said that this deal made sense.
“When we started working with Hippo we saw really, really clear and deep alignment in that shared vision of improving the way we live in and protect our homes,” Wynn said. “It is atypically early [to sell] but that speaks to the value of our product as a single offering as to why we decided to do that.”
Daniel Blanaru, vice president of growth initiatives for Hippo, said it “became pretty clear” to Hippo that this was an acquisition that would work.
“It was not just the technology and the operational muscle they have managed to build so quickly, it was even more so the close alignment on this notion of [being] proactive on a very customer-centric mentality and a relentless pursuit of quality of service,” Blanaru added.
Sheltr currently operates in the San Francisco Bay area and the Dallas, Texas metro area. Plans call for expansion in those areas and other new states into 2020. Hippo, launched in 2015, has raised $209 million in venture financing to date, including a $100 million financing round disclosed in July 2019 designed to fuel U.S. expansion of its super-quick online homeowners insurance. Hippo made its debut in the insurance marketplace in April 2017 and currently does business in 20 states.
Wand, when asked if the company’s expansion could include more acquisitions, was circumspect.
“We are constantly looking and evaluating. This is not a tool we use lightly,” he said. “We have to find [an acquisition] that we feel really strongly [adds] strategic value to the company. This is not something that happens often. We do evaluate from time to time but 99.9 percent of the time the answer is no.”
For now, Wand said, the focus is on Sheltr and integrating it services into Hippo’s offerings.
“It is just the right kind of fit for us,” he said.