Hippo Holdings Inc., a home insurance group, is the latest Israel Startup Nation firm to be forced to make cutbacks. The company just fired 10% of its workforce or 70 employees. At the same time, Ran Harpaz will step down as the company’s COO and CTO in November.
The company’s value dropped sharply on the news. Hippo Insurance’s stock plummeted from a high of more than $14 a share to just under $1 as of the end of trading Wednesday. Once worth billions, the company’s market cap has fallen to just $555.19 million today.
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The layoffs came on the last day of August, a month that saw many Israeli firms forced to make cutbacks, including some of the well-established ones. For example, Tufin, an Israeli cyber security company offering a policy-centric approach to security and IT operations laid off 55 employees, including 25 in Israel. At the same time, embattled Israeli cyber security firm NSO Group fired 100 people – about 13% of its total workforce.
The news comes just a month after Hippo was forced to greatly reduce expectations for its IPO when it completed a business combination with Reinvent Technology Partners Z, a publicly traded special purpose acquisition company SPAC. The new company is expected to have a $5 billion valuation once Hippo holds its IPO. Hippo expects to raise $550 million from the IPO. The money that Hipppo brought in, however, could have been much higher, but $192 million was returned to investors.
Hippo Insurance Services says that they offer a different kind of home insurance, built from the ground up to provide a new standard of care and protection for homeowners. Harnessing real-time data, smart home technology, and a growing suite of home services, Hippos is creating the first integrated home protection platform. Hippo insurance products are available to more than 80 percent of U.S. homeowners in 37 states. Hippo Insurance Services is a licensed property casualty insurance agent with products underwritten by various insurance companies.