Online Insurer Hippo to List in U.S. via Shell Company Merger

Move follows busy week on Wall Street for Israeli companies ■ Founded by Israelis, Hippo's merger values it at $5 billion

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שלט של וול סטריט
שלט של וול סטריטCredit: CARLO ALLEGRI/ REUTERS

Hippo, a U.S. online insurance company founded by a team of Israelis, said Thursday that it would become a public traded company, making it the latest in a flurry of Wall Street activity by Israeli or Israeli-funded companies.

Hippo acquired its listing through the increasingly popular method of merging with a publicly traded special purpose acquisition company, or SPAC. The merger with the Reinvent Technology Partners Z, which is backed by LinkedIn founder Reid Hoffman and Mark Pincus, founder of the mobile social gaming company Zynga, valued Hippo at $5 billion.

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A side deal in which about $450 million is invested in the merged entity and which will give it $1.2 billion in cash will bring the total value of the deal to $6.2 billion.

Formed in 2015 by Israelis Assaf Wand and Eyal Navon, Palo Alto-based Hippo sells custom-tailored home insurance policies online. In addition, unlike traditional insurers, Hippo offers related services such as a locksmith when a homeowner is locked out of his or her property.

Kaltura, the Israeli company that provides live and on-demand video solutions, filed with the U.S. Securities and Exchange Commission Monday to raise up to $100 million in an initial public offering. The company did not disclose a valuation for the IPO, but sources said they expected to list at as much as $2 billion.

Kaltura’s precursor company was founded 15 years ago by CEO Ron Yekutiel, Shay David, Michal Tsur and Eran Etam. Kaltura’s prospectus revealed its revenue rose 24% last year to $120 million, boosted in part by the coronavirus pandemic. Monday also saw the start of Nasdaq trading for the medical cannabis company IM Cannabis, becoming the first Israeli cannabis company to do so.

IMC had been trading on the Canadian Securities since November 2019, raising 20.4 million Canadian dollars ($16 million at current exchange rates) at a C$145 million valuation. By last week its market capitalization had risen to C$380 million, making it the biggest Israeli cannabis company by market value.

Not all the news was positive this week. The publicly traded Israeli freelance-jobs platform Fiverr pulled back Thursday from plans to raise $700 million on Wall Street through a secondary share offering. The company had announced Tuesday it planned to leverage the upsurge in its business from the coronavirus pandemic, but on Thursday reserved its decision.

“Given Wednesday’s market conditions it is not in the best interest of the company and its shareholders to raise equity capital and has withdrawn its proposed underwritten public offering of ordinary shares,” Fiverr said in a brief statement.

Fiverr shares followed the rest of the share market lower Wednesday, dropping a sharp 13% in the wake of its Tuesday fundraising announcement. The share price continued falling Thursday by 8.25% in early afternoon to $222.95.

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