Lemonade closes Metromile acquisition
Metromile shareholders received 7.3 million shares of Lemonade, valued at roughly $145 million, as part of the transaction.
Lemonade Inc. has finalized its purchase of Metromile Inc., which brings $155 million in cash, over $110 million in premiums and licenses to operate in 49 states to its new parent company. Metromile shareholders received 7.3 million shares of Lemonade, valued at roughly $145 million, as part of the transaction.
Lemonade moved to buy Metromile following its launch into the auto insurance sector. According to Shai Wininger, Lemonade co-CEO and co-founder, the decision was made because the auto insurance sector is challenging for new entrants and is “disadvantaged” by a lack of data.
“For 10 years, Metromile’s intricate sensors monitored billions of miles of driving, while their AI cross-referenced this data with hundreds of thousands of claims, to accurately score each tap of the brake and turn of the wheel,” Wininger said in a release. “We believe that adding these models into the Lemonade Car platform will make the most delightful car insurance also the most competitive, precise and fair.”
Read more: Why Lemonade & Metromile should keep you up at night
Further, the deal helps Lemonade build up that business while giving it auto-claims data and a team that’s worked in the business for a decade, Lemonade reported when the deal was initially announced.
“They have been down this road billions of times, and their proprietary data and machine-learning algorithms can vault us over the most time and cost-intensive parts of the journey,” Lemonade CEO and Chairman Daniel Schreiber previously said in the statement. “In a vast and competitive market like auto insurance, today’s deal is a huge unlock of value for our customers and shareholders.”
Metromile CEO Dan Preston will now hold the role of senior vice president of strategic initiatives, while most Metromile employees will transition to roles at Lemonade, according to the acquiring firm. Until all policyholders can be transitioned to the Lemonade app, Metromile’s app and brand will continue to operate in-market. However, Metromile common stock will stop trading on NASDAQ as of July 29, 2022.
Related: