The insurtech company hippo The marketer of home and property insurance in the USA and founded by the Israeli Assaf Wend, announced that it will lay off 70 people, representing 10% of the company’s workforce. The layoffs in the USA will take place from today to tomorrow. The notice will reach the employees later today (Wed) and the move will take effect tomorrow. Hippo reports that the compensation package will cost about 4 million dollars.
The company also announced the departure of Ran Harpaz from the position of Chief Operating Officer and Technology, and a retirement grant of $250,000, the equivalent of six salaries. As you may recall, just two months ago the CEO and founder Assaf Wend Barik was replaced by Carton, after the company’s stock fell by 80 % up to that point.
The Chief Technology Officer of Jaffa, Ran Harpaz / Photo: Yeh’ach
The Jaffa stock has fallen by about 90% since last July. Earlier this month, Hipo published its revenue and profit forecast for the end of the year. The company lowered its revenue expectations from premiums from a range of 800-820 million dollars to 790-810 million. Despite the lower forecast, it is still a 30% growth in revenues compared to the past year. As a result, the company’s income is expected to be 119-211 million dollars, lower than the original forecast of 140-142 million, and not far below the analysts’ expectations: 136.2 million dollars.
The American-Israeli company, which owns a development center in Tel Aviv, announced that the premiums in the second quarter of this year reached 240 million dollars, an increase of 29% compared to the corresponding quarter, and that the level of customer retention was 87%. Revenues for the second quarter missed analysts’ forecasts and stood at 28.7, and according to the company – its efforts to reach profitability hurt revenues in the short term. The operating profit did increase, but the EBITDA loss (earnings without depreciation and taxes) deepened from $42.3 million last year to a loss of $55.8 million in the second quarter.
The company did not specify whether the layoffs would also reach the research and development center in Israel, which is managed by a transparent seagull, but the departure of Harpaz, who was the living spirit behind the establishment of the center, does not bode well. In August of last year, we reported here in Globes about the establishment of a center in Israel and the doubling of the number of employees employed by the company in Israel to 30.