Why Ethos, once a hot insurance tech startup, could spark 2024’s first blockbuster tech IPO

DCM Editorial Summary: This story has been independently rewritten and summarised for DCM readers to highlight key developments relevant to the region. Original reporting by Tech Crunch, click this post to read the original article.

Ethos Technologies is gearing up for its initial public offering (IPO), set to take place this Thursday. If the company’s shares are priced within the expected range of $18 to $20, you’ll see it enter the public market with a valuation of up to $1.26 billion. This would raise approximately $102.6 million for Ethos itself and another $108 million for its existing shareholders. There’s also potential for an even higher valuation if investor demand proves strong.

You should know that Ethos offers software designed to simplify the process of selling life insurance. The company has attracted backing from major investors including Sequoia Capital, Accel, GV (Alphabet’s venture arm), SoftBank, General Catalyst, and Heroic Ventures. Notably, Sequoia and Accel won’t be selling any of their shares in this IPO. Ethos gained notable attention during its early growth phases, especially before the AI boom, securing investments from high-profile family offices belonging to celebrities such as Will Smith, Robert Downey Jr., Kevin Durant, and Jay Z.

By 2021, Ethos had raised $400 million and reached a $2.7 billion valuation, the majority of which was secured in that same year. Since then, you might notice that fundraising has slowed, with only small additional investments coming in, according to PitchBook data.

What stands out is that Ethos is already profitable—a rare quality in tech IPOs. According to the company’s IPO filings, it generated nearly $278 million in revenue and close to $46.6 million in net income in the nine months ending September 30. This financial health could make it an attractive option for investors looking for stable returns in the tech sector.