The story of Hippo Holdings (NYSE:HIPO) stock had an inauspicious beginning. The homeowners insurance provider emerged from a special purpose acquisition company (SPAC) deal that soured in the eleventh hour. Now, investors are wondering if HIPO stock is worth a buy.

InvestorPlace’s own Robert Lakin did an excellent job of detailing the less-than-stellar initial public offering (IPO) early last month. It’s a great primer for what happened to the company, which had the backing of the founders of Microsoft’s (NASDAQ:MSFT) LinkedIn and Zynga (NASDAQ:ZNGA) through a SPAC.

Not only did Hippo Holdings have big names behind it, but it also came from the same Tel Aviv startup incubator as Lemonade (NYSE:LMND). Initially, it looked like the new company would challenge Lemonade in the insurance technology revolution, given its pedigree. 

HIPO Stock Got Off on the Wrong Foot 

Ultimately though, Hippo would lose $192 million in funding. That money was returned to investors after Reinvent Technology Partners withdrew 83% of its capital from the project. 

Hippo was expected to receive $550 million in institutional private investment in public equity (PIPE) funding and $230 million in SPAC proceeds. This triggered a drastic fall in HIPO stock prices. 

A recent article outlining the fiasco offers a possible explanation for what caused the chaos: 

“Withdrawing part of the capital raised for the SPAC is a possible scenario in these mergers as the investors in the SPAC are the so-called ‘weak hands,’ who buy the SPAC shares even before the identity of the company that will be merged into it is known. To make it more attractive, investors in such a round receive two incentives. An option to sell the shares for their original $10 price, as well as an option to later acquire the public company’s shares.”

It seems that trepidation leading up to the IPO caused “weak hands” to err on the side of caution as the SPAC deal came under greater scrutiny. But even after that patchy start, there is hope for HIPO stock.

Is HIPO Stock Staging a Comeback?

Hippo did receive $550 million from the IPO, even though the SPAC proceeds failed to materialize as expected. That still left the insurance tech company with a reasonable shot at success. 

Part of that hope for a turnaround lies in the idea that Hippo could have been excessively punished or oversold by the market. If it truly has the capacity to challenge Lemonade, then current prices indicate real upside. 

But how can investors judge the upside potential of HIPO stock, or what to expect of it in terms of price? Well, it’s difficult to say.

There is no analyst coverage of the company currently, so there’s no help there. But HIPO shares have shown resilience this month, rising to nearly $7 on Sept. 9. 

That increase is likely attributable to the widespread desire to disrupt the centuries-old insurance industry. 

Big Names Are Interested in Hippo

Despite its unfortunate start, institutional investors are still keen to understand what Hippo Holdings has in store.

The company’s CEO Assaf Wand and CFO Stewart Ellis met with investors at a financial technology conference held by Goldman Sachs (NYSE:GS) on Sept. 9 and Sept. 10. There’s very clear potential for Hippo Holdings to impress financial institutions, despite the chaos surrounding its IPO. 

Hippo also formed a relationship with Ally Financial (NYSE:ALLY) just after going public. That deal was said to double its underwriting capacity, a surefire path toward increased revenues. 

The company didn’t have a stellar earnings report, but that might not matter. The bull thesis here is that Hippo could very well end up a phoenix rising from the ashes. All it needs is the right names behind it, and its poor start won’t matter.

The bigger picture is that insurance tech will remain an investment target, and Hippo Holdings could strengthen on that potential. 

On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks.?Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.