The tech IPO revival of 2018 continues. EverQuote, a Boston-area company that operates an online insurance marketplace, filed documents with the SEC on Friday indicating it intends to go public.
EverQuote said it might raise up to $75 million in an initial public stock offering, although that number could shift if the Cambridge, MA-based company follows through on its IPO plans. It intends to trade on the New York Stock Exchange under the ticker symbol “EVER.”
After more than two years of weak tech IPO activity, this year has seen a flurry of public market debuts by tech companies. They include Spotify (NYSE: SPOT) and Dropbox (NASDAQ: DBX) in consumer tech, as well as enterprise software providers such as Smartsheet (NYSE: SMAR), DocuSign (NASDAQ: DOCU), and Carbon Black (NASDAQ: CBLK), the Boston area’s only tech IPO in 2018.
EverQuote could become the second. If it does, it would add another notch in the belt of the Boston-area consumer tech sector, which is often overshadowed by the local group of enterprise tech firms. Other local consumer tech IPOs in recent years include TripAdvisor (NASDAQ: TRIP); Kayak, (now owned by Booking Holdings (NASDAQ: BKNG), which changed its name from Priceline Group early this year); Wayfair (NYSE: W); and CarGurus (NASDAQ: CARG), which went public last year.
EverQuote has built a fast-growing business while keeping a relatively low profile. The company says more than 10 million consumers visit its online insurance marketplace every month, where they can search for auto, home, and life insurance policies offered by more than 160 insurance carriers. EverQuote says it brings consumers to its site primarily through algorithmic-based tools such as search engines, display advertisements, and social media. It plans to boost its brand recognition by marketing itself in new ways, including on TV and radio, according to the SEC filing.
Consumers can use EverQuote to shop for policies, although sometimes the best deals are only available offline after connecting with insurers, the company has said. Rather, EverQuote’s pitch is that it eases the matchmaking process for insurance buyers and sellers. It’s part of a growing number of tech companies out to simplify insurance shopping through online tools, such as The Zebra, based in Austin, TX, and Insurify, also located in Cambridge. EverQuote also offers a mobile app that helps track users’ driving habits, similar to Boston-based startup TrueMotion (formerly known as Censio).
EverQuote’s insurance shopping service is free for consumers. EverQuote makes money through referral fees from insurers, who are looking for more effective (and cheaper) ways to win customers than traditional methods, such as media advertising campaigns.
EverQuote generated $126.2 million in revenue last year, up from $122.8 million in 2016 and $45.6 million in 2013, the earliest data the company provided in its preliminary IPO filing. It reported $40.7 million in revenue during the first three months of this year, compared with $31.7 million in the same period last year.
But EverQuote isn’t profitable. It had a $5.1 million net loss last year and a $1.3 million net loss in the first quarter of 2018.
It has gotten to this point without raising a massive amount of venture capital: around $37.5 million, according to previous SEC filings. Its largest shareholders include Link Ventures, Stratim Capital, Savano Capital Partners, and Seth Birnbaum, EverQuote’s co-founder and CEO.
Birnbaum started the company with Tomas Revesz, the company’s chief technology officer, and Dave Blundin, its chairman, according to last week’s SEC filing. Birnbaum and Revesz previously co-founded Boston-area cybersecurity firm Digital Guardian. Blundin is the co-founder and managing partner of Link Ventures and Vestigo Ventures, two local venture capital firms. EverQuote was incubated at Cogo Labs, which is affiliated with Link Ventures.
Here are four more interesting tidbits from the IPO filing:
1. EverQuote was incorporated in 2008 under the name AdHarmonics. It adopted its current moniker in 2014.
2. The company employs more than 230 people, including more than 130 data scientists, analysts, and engineers. Most of its employees are located in Cambridge, and the company also has an administrative office and call center in nearby Woburn, MA.
3. EverQuote’s business relies heavily on Progressive, but there are signs the company is reducing its dependence on the large insurer. Progressive accounted for 23 percent of EverQuote’s revenue in 2016, 20 percent last year, and 16 percent in the first quarter of this year.
4. As of March 31, EverQuote had $2.6 million in cash and $5.8 million in debt.