Israeli digital insurance company Lemonade (NYSE: LMND) today announced that it is acquiring data science company Metromile (Nasdaq: MILE), which is focused on AI for personalized auto insurance. The acquisition is an all-stock transaction that implies a fully diluted equity value of approximately $500 million, or just over $200 million net of cash. Under the terms of the deal, Metromile shareholders will receive Lemonade common shares at a ratio of 19:1.
The acquisition comes one week after Lemonade, which already sells home insurance and pet insurance, launched its car insurance product in Illinois and said it plans expanding car insurance to other US states. Metromile has a license to sell insurance in 49 states and is currently operating in 8 of them, Lemonade cofounder and COO Shai Wininger said.
Metromile has been pioneering digital car insurance. The San Francisco based company's car-mounted precision sensors have taken over 400 million road trips in recent years, covering billions of miles and sending real-time streams to the Metromile cloud. These are cross referenced with actual claims data, yielding precise predictions for losses per mile driven. These algorithms hold the promise of propelling Lemonade Car from a newcomer in the car insurance space to its vanguard.
Lemonade cofounder and CEO Daniel Schreiber said, "We launched Lemonade Car last week, and we think you’ll love how it looks and handles. Pop the hood and you’ll see that it's powered by telematics and architected to learn from the data it generates, with precision pricing as its ultimate destination. That’s where Metromile comes in. 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. In a vast and competitive market like auto insurance, today’s deal is a huge unlock of value for our customers and shareholders."
Published by Globes, Israel business news - en.globes.co.il - on November 9, 2021.
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