Loop, the U.S. car insurance agency that makes it their business to serve the underserved, including people who have no or low credit, co-founded by John Henry of Harlem Capital, has laid off staff due to fundraising challenges.
Using data in novel ways, LOOP is capitalizing on industry-wide mis-pricing, delivering an affordable and dignified experience to its members.
Loop’s Co-founder Carey Nadeau emailed affected employees, also sharing the letter on LinkedIn. Nadeau called the layoffs a “last resort” after unsuccessful fundraising. An investor withdrew at the final moment, forcing the company to cut its workforce.
Effective today, June 16, 2024, we are no longer able to continue your employment at LOOP. I have come to this decision as an absolute last resort — John and I were unsuccessful in raising additional capital after 20 months of trying our very best.
Carey Anne Nadea, Co-Founder and Co-CEO at Loop
“Our last opportunity had an investor pull out in the very final hour, and we just fell short. As disappointing as this is, I can’t let our mission die, and see your work not have the impact it deserves. So we’ve come to this hard decision, that we’ll continue forward only with a much smaller team and operate our way through this”, Carey Nadeau says.
This sucks for everybody, but what we’ve been able to accomplish is something to be proud of — pushing the limits on car insurance, inspiring people, and serving others — and I hope that you have enjoyed your time and the people you met along the way.
The exact number of layoffs remains unclear. However, a LinkedIn post from a former employee indicated that the reductions affected insurance agents, customer care, data analytics, marketing, software engineering, and product teams.
Henry co-founded Loop with Nadeau in 2020 shortly after stepping down from his role as a venture partner at his firm Harlem Capital.
Loop sought to serve as an alternative insurance model for pricing insurance that didn’t rely as heavily on structurally biased metrics like credit scores and education used by legacy models.
Launched in 2021, Loop raised a $3.25 mn seed round led by Freestyle VC, with contributions from Backstage Capital and Uprising Ventures.
The company secured a $21 mn Series A led by Foundry Group and 01A (former Twitter CEO Dick Costolo and COO Adam Bain’s fund) and an $8 mn extension round in 2023.
Loop’s fundraising difficulties reflect broader trends among Black-founded companies.
TechCrunch reported last year that Black founders raised less than 1% of all venture capital funding, a number that has continued to dwindle as the promises to back more Black founders made after the murder of George Floyd have diminished in recent years.
2024 continues to be a difficult fundraising year across the board. Outside of select areas, like artificial intelligence tools, 2024 has seen some of the slowest funding rates since 2018.
