(Image source: Kin.)
Kin, a Chicago-based insurance technology company seeking to simplify home insurance in disaster-prone areas across the country, has announced that it has entered into a definitive business combination agreement with Omnichannel Acquisition Corp. (Summit, N.J.), a publicly traded special purpose acquisition company led by entrepreneur Matt Higgins. Upon closing of the transaction, the combined company will be named Kin Insurance, Inc. and is expected to be listed on the NYSE under the new ticker symbol “KI.” The business combination reflects an estimated implied pro forma enterprise value at closing of $1.03 billion, assuming no redemptions by Omnichannel’s public stockholders. The transaction is further supported by a fully committed $80 million PIPE at $10 per share of Class A common stock of Omnichannel led by HSCM Bermuda and Senator Investment Group, according to a statement from Kin.
Kin, which currently operates in Florida, Louisiana and California, also announced today it has accelerated its ability to enter into new markets by signing a stock purchase agreement to acquire an inactive insurance carrier that holds licenses in more than 40 states. Kin says that it expects both the proposed acquisition of the inactive insurance carrier and the business combination to close in the fourth quarter of 2021 following the satisfaction of customary closing conditions, including regulatory approval, and in the case of the business combination, shareholder approval.
Kin notes that golfer Rory McIlroy and NBA player Draymond Green, who both participated in a $69.2 million Series C investment round in June 2021, will work to raise Kin’s profile across the country in current markets and in new geographies.
‘Vastly Underserved Market’
Kin says it sees a significant opportunity to further grow and scale in a “vastly underserved market,” using its direct-to-consumer model, along with scalable technology, that enables lower customer acquisition costs. Kin offers consumers a “simple, personalized digital experience” and ongoing engagement to support optimal customer satisfaction. The company reports a 92 percent retention rate and a Net Promoter Score of 85 through the quarter ended March 31, 2021. The company expects to more than triple written premiums in 2021 and achieve over $400 million of total written premiums by end of 2023, corresponding to a 5-year CAGR of 139 percent, and to more than quadruple gross profit in 2021 compared to 2020.
“The home insurance industry has been coasting for years on legacy technology and an antiquated way of interacting with customers,” comments Sean Harper, Co-founder and CEO, Kin. “It is more than ripe for an innovative alternative and that is exactly why we created Kin: to provide customers with a better home insurance offering, better pricing and an overall better experience.”
In a market where access to affordable home insurance is challenging in regions impacted by climate change and severe weather, Kin’s proprietary technology and deep data advantage enables us to best evaluate risk and price home insurance fairly for consumers, Harper asserts. “Our customers receive a simple, direct and exceptional experience that provides them with real savings and leaves them delighted and loyal to Kin,” he says. “As a result, we are growing fast, generating attractive unit economics, and we believe we are well-positioned to significantly expand our market share moving forward.”
Opportunity to Reinvent Homeowners Insurance Marketplace
“The Kin team has leveraged their decades of insurance and fintech experience to build a capital efficient company that is experiencing outstanding growth across the board, along with compelling and superior unit economics,” comments Matt Higgins, Chairman and CEO, Omnichannel. “Kin’s direct-to-consumer approach to insurance is a true differentiator and provides it with a clear-cut advantage versus the competition. As a result, Kin has an opportunity to reinvent and lead the massive homeowners insurance marketplace.”
Higgins says the Omni team is currently engaged in helping to elevate Kin’s brand presence, expanding the insurer’s acquisition channels and layering in what he characterizes as the most cutting-edge acquisition tactics. “The pandemic compressed years of ecommerce adoption and upended industries overnight,” Higgins notes. “Now the future belongs to frictionless commerce, and the homeowner’s insurance industry is lagging way behind. We believe Kin is well positioned to capitalize on that unmet demand for years to come.”