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Ondo InsurTech debuts via SPAC RTO using Spinnaker Acquisitions


This week, Spinnaker Acquisitions was readmitted to the London Stock Exchange under the name “Ondo InsurTech” (LSE: ONDO), becoming the first insurtech company to float on the market. This is a result from the reverse takeover agreed between Spinnaker Acquisitions and Labs, a subsidiary of HomeServe, which previously traded on the FTSE 250.

Highlights of the readmission

Ondo Insurtech is soon to be the new name for the special purpose acquisition company (SPAC) Spinnaker Acquisitions. The firm changed its name after closing the acquisition of LeakBot, a business-to-business company with a patented water security system that prevents small leaks from turning into insurance claims.

Through the readmission, Spinnaker Acquisitions has raised gross proceeds of just under £3.5 million through fundraising comprised of a placing and subscription, at an issue price of 12p per share. Upon admission, it will have a market capitalisation of around £8.2 million. SI Capital Limited acted as broker and placing agent to this fundraising.

Craig Foster, CEO of Spinnaker Acquisitions Plc said “I am delighted to have reached this milestone of admission to trading as an independent public company. The whole Ondo team is looking forward to the challenge and significant opportunity ahead of us”.

What is LeakBot?

LeakBot will become Ondo InsurTech’s flagship product. The LeakBot system is an intelligent water security system for the detection of micro-leaks in residential properties, enabling household insurers to mitigate the cost of claims arising due to an escape of water.

As of today, there are almost 40,000 registered LeakBot devices supplied to partners. Ondo InsurTech is in discussions with eleven potential partners in the UK, US and parts of Scandinavia to enter into further partner contracts, according to the company. They would pay Ondo InsurTech for the LeakBot system and derive the benefit of claims mitigation through the prevention of leaks at insured households.

Funds raised from the stock market listing will be used over the next year to develop more partnerships, attract more customers and improve the company’s information technology system. Onboarding, delivery and IT system enhancements will also be a priority.

SPACs still available on the London market

The number of smaller SPACs listed in London is limited, following reforms by the FCA to the UK’s cash shell listing regime.

What are the prospects for Ondo InsurTech?

According to Ondo InsurTech, water damage is the number one source of claims on residential properties in the 97 million households in LeakBot’s target markets and accounts for approximately 30% of claims paid in the UK and USA, and over $17 billion of claims annually across the two countries. This means the company is exposed to an extremely large range of potential customers, thereby increasing the likelihood of experiencing long-term financial success and sustained growth.

In light of the growing opportunities in the UK, Ondo has decided to move its engineering, product development and manufacturing back to the country from China in an attempt to provide greater certainty for its customers and partners.

In addition, the global insurtech market is expected to reach a value of over $10 billion by 2025, with growth of over 10% from 2019 to 2025, offering multiple opportunities for companies in the sector. As an emerging business in this industry, Ondo InsurTech is set to take advantage of these growth opportunities.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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