Lemonade closes acquisition of Metromile

Lemonade, an insurtech carrier providing home, renters, pet, and auto insurance, has closed its acquisition of the usage-based auto insurance insurtech Metromile, in the first merger of publicly listed insurtech carriers.

Metromile shareholders received 7.3 million LMND shares. The company adds $110 million in auto premiums to Lemonade’s book less than a year after it launched its Lemonade Car product. Eventually, all Metromile policyholders will be transitioned to the Lemonade Car brand.

Metromile CEO Dan Preston is now SVP of strategic initiatives for the combined company. “While Metromile was at the forefront of using big data and AI in car insurance, Lemonade forged a parallel path for several complementary lines of insurance. That makes for a powerful combination,” he said in a statement. “While the Metromile brand will sunset over time, its promise to  consumers will be realized bigger, better, and sooner now that we’ve joined forces.”

Lemonade launched in 2016 with renters and homeowners insurance in New York. In 2020, it filed for an IPO that debuted in July of that year. That year, it also introduced a pet insurance product; Lemonade Car came in 2021.

Metromile launched in 2012 offering usage-based auto insurance in Oregon. In September 2016, it acquired Mosaic Insurance, giving it licenses in all 50 states. In November of 2020, it announced it would go public through a merger with a special-purpose acquisition company; however, like many of those deals, it struggled to gain traction, eventually leading to the acquisition by Lemonade announced a year later and closed today.

“We ... believe auto insurance can be treacherous for newcomers, disadvantaged by a lack of data and scale, which is why we bought Metromile,” said Shai Wininger, Lemonade co-CEO and cofounder, in a statement. “For ten years, Metromile’s intricate sensors monitored billions of miles of driving, while their AI cross-referenced these data with hundreds of thousands of claims, to accurately score each tap of the brake and turn of the wheel. Injecting all that intelligence into Lemonade Car could make the most delightful car insurance also the most competitive, precise, and fair. That’s why we’re so excited to welcome Metromile into the Lemonade family.”