TypTap, an insurance technology business, and Justworks, a human resources software company, both postponed their initial public offerings (IPOs) in the United States on Wednesday, joining a growing number of companies rethinking their plans to go public due to unpredictable market conditions.
When the pandemic prompted the insurance industry to rely extensively on artificial intelligence and big data to reach customers, TypTap Insurance Group Inc quietly filed for an IPO in August of last year.
TypTap’s IPO has been postponed, according to parent company HCI Group Inc (HCI.N), following a recent sell-off in technology stocks and the poor performance of other firms that went public in 2021.
According to Refinitiv statistics, more than 60% of businesses that went public last year are currently trading below their IPO price. Human resources and payroll software maker Justworks also blamed market conditions for delaying its U.S. IPO plans. Apparel chain operator Authentic Brands Group Inc withdrew its U.S. listing plans last week.
In February of last year, TypTap, which was founded in 2016, raised $100 million from a fund linked with Centerbridge Partners. TypTap’s post-money valuation was estimated to be at $850 million based on the investment, which represented around 11.75 percent of the company.
Tiptop is a property and casualty insurance company established in Tampa.
According to a filing, its in-force premiums have more than doubled to $214 million by September from the end of 2020.
In the nine months ending September, the company reported a larger net loss of $14.7 million, compared to $7.5 million the prior year.