Loop, the automobile insurance coverage firm co-founded by Harlem Capital co-founder John Henry, has laid off employees as the corporate struggles with fundraising.
Henry took to Instagram to put up the e-mail his co-founder Carey Nadeau despatched to impacted employees on June sixteenth. Nadeu additionally posted the letter to LinkedIn. It acknowledged that this was the “absolute final resort” for the corporate after it had been unsuccessful in elevating further capital after 20 months of attempting. “Our final alternative,” Nadeau wrote, “had an investor pull out on the very closing hour, and we simply fell quick.”
The e-mail continued, saying the corporate determined to cut back its headcount because it seeks to function by its monetary difficulties. It’s unclear how many individuals have been impacted. Nonetheless, in response to a LinkedIn post by a former worker, the cuts impacted individuals who have been insurance coverage brokers, in addition to individuals in buyer care, knowledge analytics, advertising and marketing, software program engineering and product.
Henry didn’t instantly reply to our request for remark.
Henry co-founded Loop with Nadeau in 2020 shortly after stepping down from his function as a enterprise companion at his agency Harlem Capital, in response to his LinkedIn profile. As TechCrunch previously reported, Loop sought to serve instead insurance coverage mannequin for pricing insurance coverage that didn’t rely as closely on structurally biased metrics like credit score scores and training utilized by legacy fashions.
The corporate launched out of stealth mode in 2021, elevating a $3.25 million seed led by Freestyle VC, with participation from Backstage Capital and Rebellion Ventures. Loop then went on to lift a $21 million Sequence A, the company said, led by Foundry Group and 01A (former Twitter CEO Dick Costolo and COO Adam Bain’s fund). In 2023 it raised an $8 million extension spherical, in response to PitchBook.
Loop’s fundraising troubles usually are not distinctive to Black-founded firms. TechCrunch reported final 12 months that Black founders raised less than 1% of all enterprise capital funding, a quantity that has continued to dwindle as the guarantees to again extra Black founders made after the homicide of George Floyd have diminished in recent times. 2024 continues to be a tough fundraising 12 months throughout the board. Outdoors of choose areas, like AI, 2024 has seen a few of the slowest funding charges since 2018, Crunchbase reported.
In his Instagram put up, Henry wrote that the state of affairs was “sudden,” however the firm was going to function by it. Different Black founders rushed to empathize and specific their help for Loop on Instagram.
“It’s powerful out right here proper now,” Melissa Butler, founding father of The Lip Bar, wrote. “Thanks for sharing your journey with us.”
