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IPO would be 'colossal distraction' for $2B pet broker, but 'never say never'

Technology-enabled pet insurance broker Bought By Many Ltd., valued at more than $2 billion after a recent $350 million funding round, has no plans to float on the stock market, according to co-founder and CEO Steven Mendel.

"Never say never. It's just that there seems little reason to do it right now," Mendel said in an interview. "I just think it would be a colossal distraction to what we're up to."

Mendel is somewhat dismissive of the company's status as a so-called unicorn, generally defined as a startup valued at more than $1 billion, saying it was not something the company set out to be. But the $350 million series D funding, led by Swedish investor EQT AB (publ), means the company will not have to worry for "a very, very long time, if in fact ever again," Mendel said. That should allow the company to focus on building itself up rather than worrying about paying its bills.

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Bought By Many started life in 2012 in the U.K. as a service to unite people with similar interests to allow them to get cheaper insurance premiums. It launched as a pet insurance provider in the U.K. in 2017, started up in Sweden in 2019 under the ManyPets brand and began operations in the U.S. state of Illinois in 2021, also as ManyPets. The policies it designs and sells are underwritten by Munich Re subsidiary Great Lakes Insurance SE in the U.K. and Sweden. For U.S. business, Randall & Quilter Investment Holdings Ltd.-owned insurer Accredited Surety & Casualty Co. Inc. acts as fronting carrier, with the risk ceded to Munich Re and Hannover Re in equal parts.

Gross written premium for the year to March 31 was £146 million, double the £72.1 million in the prior-year period, which was already about twice the £35 million written in the year to March 2019. Mendel said the company has built in "very aggressive" growth into its plan. The CEO acknowledged that doubling gross written premium every year will get tougher as the company gets bigger. Doubling again in the current year is "a stretch target ... rather than an actual target," Mendel said, but he anticipates getting the "vast majority of the way there."

Expansion plans

Bought By Many's business is not yet turning a profit, Mendel said, but the company anticipates its U.K. business becoming profitable on a stand-alone basis in mid-2022. The company plans to roll out across the U.S. and should be in all 50 states and the District of Columbia within the next year.

After the U.S. expansion, the company wants to push into another continental European country, although it has not yet decided where. Given that Germany is the largest European insurance market, Mendel said it would be "crackers to ignore it," adding that European expansion would likely be in one of the continent's largest markets, which also include France and Italy.

The expansion plan could prompt Bought By Many to seek additional capacity providers in the U.S. While doing so is not currently on the agenda, it would be a "sensible and logical thing to do" as the U.S. business gets larger, Mendel said.

Mendel believes it unlikely Bought By Many will become a full-stack insurer as there are capacity providers outside its current roster "very keen to work with us." While some companies may find that using others' capacity constrains the creation of new products, "that has just not been our experience at all." The CEO said Bought By Many developed a new product with Munich Re in March 2020 "in eight working days."