Metromile (Facebook)
Lemonade, an Israeli insurtech firm powered by AI, has bought ought Metromile, an American data science company focused on auto insurance. Lemonade will acquire Metromile in an all-stock transaction that implies a fully diluted equity value of approximately $500 million, or just over $200 million net of cash.
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Founded in 2015 by COO Shai Wininger and CEO Daniel Schreiber, Lemonade is a licensed insurance carrier offering renters, homeowners, and pet health insurance in the United States, and contents and liability insurance in Germany and the Netherlands. It is powered by artificial intelligence and behavioral economics and driven by social good. A certified B-Corp, Lemonade donates unused premiums to nonprofits selected by its community as part of its annual Giveback program. It only recently expanded into the area of pet insurance. It is also expanding into life insurance.
The company broke the one million customer mark at the end of 2020. Lemonade first went public on the NYSE last July, raising $319 million in the IPO. While the company’s stock currently trades at almost double its IPO price, its shares have lost more than 50% of their value since January 1. As of the end of Monday’s trading Lemonade has a market cap of $5.384 billion
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In a blog post, Lemonade explained its acquisition of Metromile saying, “While Lemonade has been at the forefront of using big data and AI in home and pet insurance, Metromile was busily trailblazing a parallel path for car insurance.”
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We’re joining forces with @Lemonade_Inc! Together, we’ll be able to accelerate the growth of the most customer-centric, fair, and affordable car insurance to millions of drivers throughout the US. Key info: https://t.co/5OtnQAVRAY pic.twitter.com/jRdGYh350y
— Metromile (@Metromile) November 8, 2021
Ten years ago, Metromile pioneered the use of continuous real-world data feeds to derive high fidelity predictions for losses per mile driven. It is this decade-long head start, in combination with the Lemonade tech stack that holds the promise of boosting Lemonade Car to the vanguard of car insurance.
Metromile enjoys 49 state licenses, over $100 million of seasoned in-force premium (IFP), over $250 million of cash on the balance sheet, and a team unmatched for their expertise in harnessing big data and AI for car insurance.
Metromile’s car-mounted precision sensors have taken over 400 million road trips, covering billions of miles and sending real-time streams to the Metromile cloud. These proprietary data were mapped onto behaviors (how much someone drives, as well as when, where, and how they drive) and cross-referenced with actual claims data, enabling these behaviors to be scored for risk with great granularity.
“We’ve long admired Lemonade for its beautiful products, world-class customer experience, unprecedented growth, and socially-impactful business model,” said Dan Preston, CEO of Metromile. “The data science-driven technology platform we built created fairer and more individualized car insurance for consumers in an industry marred by vast inequities. Joining forces with Lemonade Car will create the most customer-centric, fair, and affordable car insurance, and is a great outcome for Metromile shareholders, who will benefit as shareholders of the combined company. It also means that now, homeowners, renters, and drivers alike can have all of their insurance needs with a single company that truly has their best interests at heart.”
