Pet insurtech ManyPets reported more than halving its losses in its latest accounting period up until March 31 2024, despite revenue falling for the second year in a row. The results come amid a turbulent period that has seen the company shake up leadership, make layoffs and exit all international markets, as rising inflation has battered the insurance market.
Turnover dropped from £35.9m the previous accounting period to £29.6m, according to company accounts, shared exclusively with Sifted. Those figures fell from a high of £42.3m in 2022. Losses were also cut from £67.5m to £33m.
The UK-based company has recently undergone a period of restructuring as it manages increased costs of providing insurance driven by inflation and soaring vet bills.
Luisa Barile took over as CEO of the company in February this year, as founding chief exec Steven Mendel stepped down. ManyPets laid off around 100 staff over the summer and sold off the US arm of its business in November.
Now the company hopes to hit profitability by 2026, says Barile — who expects losses to continue to fall and revenue to rise next year. “High inflation in 2022 and 2023 has had knock on costs for all insurance businesses, as [they set policy] prices 12 months in advance,” she tells Sifted. “Path to profitability has been the key driver the last few years.”
International pullback
Founded in 2012, ManyPets has raised a total of $483m, according to Dealroom, including a $350m Series D at a valuation of $2.4bn during the heady days of 2021. The company — which counts Octopus Ventures, Munich Re Ventures and EQT Group as investors — expanded to Sweden in 2019 and the US in 2021.
But skyrocketing inflation during 2022 and 2023 hiked the costs of paying out for claims on insurance policies, hitting revenue numbers, Barile tells Sifted. ManyPets has now increased policy costs to counter this.
For an insurance company like ManyPets, revenue is worked out by subtracting the cost of payouts from the money it makes from its policies. Turnover also dropped due to the company pulling out of its Swedish market in 2023, she adds.
ManyPets’ US arm was sold for £22m in November as the company pulled back to exclusively focus on the UK — where it currently holds 11-13% of the UK pet insurance market, says Barile.
“The US required a lot of investment to grow,” she tells Sifted — adding that it would have taken £50-100m capital to reach profitability in that market, partly due to the cost of talent and marketing, alongside the expenses around getting regulated state-by-state, says Barile.
Insurance across other sectors has seen price hikes above inflation. While the price of consumer goods and services in general — also known as the CPI index, a commonly used measure of inflation — rose 21% May 2021-June 2024, car insurance policies increased by 82%, according to the Office for National Statistics.
Path to profitability
“My main focus has been on bringing the group to profitability,” Barile tells Sifted — which she says will happen by 2026.
“When I took over, I put forward a three year plan. The first year was about reshaping and refocusing the business. The second year is about growth — which is the year we’re entering now — and the third is to consider strategic options.”
Those strategic options could be acquisitions of other companies as it looks to gobble up more market share or it could attempt international expansion once more, Barile adds. ManyPets has £88.7m cash reserves and has no plans to raise external capital, she says.
Now the company is looking to become the market leader in pet insurance in the UK — which Barile says would come if it hits more than 20% of market share. While ManyPets won’t put a date on when that might happen, Barile says the company plans to roll out a more affordable range of pet insurance policies and hopes to hit 15% market share in the next two years.
Read the orginal article: https://sifted.eu/articles/manypets-losses-fall-layoffs-market-exits-news/
