EverQuote Founders Talk IPO Fever, Journey from Biotech to Insurance
When I got on the phone Thursday with the leaders of EverQuote, Boston’s newest publicly traded tech company, I expected them to grumble about how I cast their venture as a “company you’ve never heard of” in yesterday’s story about its IPO.
On the contrary, EverQuote CEO and co-founder Seth Birnbaum agreed with me.
The IPO is “an opportunity to change that—raise the profile of the company,” Birnbaum said.
He and Tomas Revesz, EverQuote co-founder and chief technology officer, called me at noon on the East Coast while they were still at the Nasdaq stock exchange’s Manhattan offices. (They’re pictured above, hugging with co-founder and chairman David Blundin after the company’s stock began trading publicly.) Four hours later, EverQuote’s stock closed its first day of trading at $18.02 per share, almost unchanged from its IPO price of $18 per share. Earlier in the day, the stock traded as high as $22.09 per share.
The concept of an online insurance marketplace isn’t going to blow anyone’s hair back, but Birnbaum and Revesz see an opportunity to build a big company. Insurers selling auto, home, life, and other non-healthcare policies spent around $120 billion last year on sales and marketing, Birnbaum said. Only about $3 billion of that was spent online, but that segment of insurers’ marketing budget is growing about 16 percent each year, he claims.
“There’s some indicators that shift is accelerating,” Birnbaum said.
EverQuote wants to enable that shift by helping to match insurers with potential customers. The company says more than 10 million consumers visit its online marketplace each month, where they can search for auto, home, and life insurance policies offered by more than 160 insurance carriers. (The Cambridge, MA-based company also launched a mobile app that encourages safe driving habits, which it plans to enhance by adding opportunities for users to earn insurance discounts for safe driving behavior, Revesz said. More than 500,000 users have downloaded the app, Birnbaum said.)
EverQuote has said it brings consumers to its marketplace primarily through algorithmic-based tools such as search engines, display advertisements, and social media.
“The insurance landscape in particular is less about [search engine optimization] and more about what you’d call sophisticated paid or programmatic advertising,” Birnbaum said. “Nobody rolls out of bed in the morning looking to read about insurance quotes. Except for me.”
Prior to EverQuote, Birnbaum and Revesz worked together at Boston-area cybersecurity company Digital Guardian, formerly known as Verdasys, and NeoGenesis Pharmaceuticals. Birnbaum co-founded both of those ventures, and Revesz served as a vice president at both.
Few entrepreneurs have gone from biotech to cybersecurity to insurance. The common thread between each company, Revesz said, has been analyzing tons of data and trying to solve complex systems engineering problems.
But EverQuote is their first public company. (NeoGenesis was acquired by Schering-Plough and venture-backed Digital Guardian remains privately held.) Birnbaum said it was the right time to take the 230-person company public because the business is humming, the insurance sector’s trends bode well, and the IPO market for tech companies is healthy once again.
“The market window is open,” Birnbaum said. “It’s a very good time to be a high-growth public tech company.”
[Top photo by Libby Greene/Nasdaq, Inc. Used courtesy of EverQuote.]