Insurance company Lemonade said late Monday it has agreed to buy Metromile in an all-stock deal, a bid to jumpstart its auto-insurance business that sent shares of Metromile surging 7% higher in after-hours trading.
The deal would value Metromile MILE,
Lemonade launched its car insurance last week, and Metromile’s proprietary data and algorithms “can vault us over the most time- and cost-intensive parts of the journey,” Lemonade’s Chief Executive and co-founder Daniel Schreiber said in a statement. “In a vast and competitive market like auto insurance, today’s deal is a huge unlock of value for our customers and shareholders.”
Lemonade has been at the forefront of using “big data and AI in home and pet insurance,” while Metromile has gone through “a parallel path for car insurance,” Lemonade said.
Metromile’s car-mounted sensors have covered billions of miles, cross-referencing the data streams with claims data and yielding “precise predictions” for losses per mile driven, Lemonade said.
The deal is expected to close in the second quarter of 2022, pending regulatory approvals. Shares of Lemonade fell 6% in the extended session.
