Insurtech managing general agent Loop laid off an undisclosed number of employees on June 16 after failing to raise additional capital, according to Co-founder and Co-Chief Executive Founder Carey Anne Nadeau.
She called the layoffs an “absolute last resort,” saying she and Co-founder and Co-CEO John Henry had worked unsuccessfully for 20 months to raise the money for the company founded to address structural bias in the insurance market. It started with personal automobile in Texas.
“Our last opportunity (which we had shared with you) had an investor pull out in the very final hour, and we just fell short,” Nadeau said in an email to impacted employees that she also posted online.
“As disappointing as this is, I can’t let our mission die and see your work not have the impact it deserves. So, we’ve come to this hard decision, that we’ll continue forward only with a much smaller team and operate our way through this,” Nadeau said.
She thanked impacted employees and offered her support.
Loop launched after raising $3.25 million in 2020. Loop excludes credit scores in rate filings, a factor “other carriers rely on heavily but has been proven to disadvantage communities of color. We also do not consider education, occupation or even gender,” Henry said earlier.
He said the industry could offer diverse communities more competitive rates by replacing those factors with more direct, relevant measures of risk such as driving behavior and the risk of specific roads driven.
Loop closed a $21 million Series A round late in 2022 that was co-led by Foundry Group and 01A, the fund of former Twitter CEO Dick Costolo and Chief Operating Officer Adam Bain. Rap artist and avid angel investor Nas also participated.
The insurtech reported that direct premiums written in 2023 rose to $26.3 million from $7.9 million a year earlier and the number of customers tripled to more than 12,000 from 4,000.
According to Loop its average customer saves $1,656 annually. Twenty-six percent live in cities.
Last July, Loop said it planned to expand to up to five more states within 18 months.
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