Online insurance marketplace Policygenius has agreed to be acquired by fellow digital insurance platform Zinnia, to create a tech-focused platform covering the full insurance process, executives at the companies told Reuters.
Backed by Eldridge, the investment firm founded by Todd Boehly, Zinnia uses technology to make the servicing and processing of life insurance and annuity business more efficient.
This back-office focus will be twinned with Policygenius’ consumer-facing offering, which allows people to compare and purchase insurance from a wide range of carriers.
“We’ve built a very large customer base, and we’re excited about the opportunity to bring the end-to-end consumer distribution and insurance carriers together,” said Jennifer Fitzgerald, Policygenius Co-founder and CEO, who will join Zinnia’s board.
The price which Greenwich, Connecticut-based Zinnia will pay for Policygenius was not disclosed. However, the combined company would have an enterprise value of over $1 billion, a source familiar with the matter said.
Policygenius will contribute about one third of the revenue of the combined company.
The source added the deal was also being supported by around $200 million of new capital coming from Eldridge, as well as KKR & Co Inc and other existing Policygenius investors.
The transaction comes at a time when many firms, having entered the market with significant investor backing to digitise and improve the insurance industry, are struggling to evolve into profitable companies that can compete with traditional big-name insurers.
New York-based Policygenius laid off 25% of its employees in 2022, citing worsening economic conditions. In total, Policygenius had raised over $280 million from investors and was last valued at $775 million, according to data provider PitchBook.
“What I think we can do is to provide better technology to make the value chain frictionless, which will increase growth of the carriers, increase distribution of the agents and make a better experience for the consumers,” said Michele Trogni, chief executive at Zinnia.