Lemonade buys US data science company to strengthen auto insurance offer
Israel-based insurance technology company Lemonade on Tuesday said it has reached a definitive deal to buy US digital insurance platform MetroMile to bolster its new auto insurance offering, a product the company has announced last week.
The acquisition deal – Lemonade’s first – is for an all-stock transaction with a net worth of around $ 500 million, or just over $ 200 million in cash. Under the transaction, Metromile shareholders will receive Lemonade common stock at a 19: 1 ratio.
San Francisco-based MetroMile, founded in 2011, is an auto insurance company that uses data science and AI to deliver personalized insurance policies by the mile. MetroMile also licenses its technology platform to insurance companies around the world.
Lemonade made its first foray into the nearly $ 800 billion global auto insurance market last week when it unveiled Lemonade Car, a new service that harnesses telematics – a field that combines telecommunications and telecommunications. computing – to measure how much people drive and how safely they drive. , to provide better rates for safe, low-mileage drivers, the company said. The app will also offer real-time accident detection, access to 24/7 roadside assistance and the ability to send emergency services.
Drivers of hybrid and electric vehicles (EVs) are expected to receive special discounts on their auto insurance, as are existing users of Lemonade’s other insurance offerings.
Lemonade co-founder and CEO Daniel Schreiber said in a statement that MetroMile has “walked this road billions of times, and their proprietary data and machine learning algorithms can get us through the longest and longest parts. costly of the trip. In a large and competitive market like auto insurance, today’s deal is a huge unlock of value for our customers and shareholders.
MetroMile CEO Dan Preston said: “Joining forces with Lemonade Car will create the most customer-centric, fairest and most affordable auto insurance, and is a great result for Metromile shareholders, who will benefit as shareholders of the combined company. It also means that now homeowners, renters and drivers can have all of their insurance needs with one company that truly has their best interests at heart.
Lemonade has been making waves in the traditional insurance industry since 2015, when it was founded in Tel Aviv by Schreiber and Shai Wininger, also co-founder of Fiverr. The company uses technologies such as artificial intelligence and chatbots, along with behavioral economics, to provide affordable homeowners, tenants, life insurance and pets in the United States with everything via a mobile application. Some of its offers are also available in Germany, the Netherlands and France.
Lemonade claims its claims process and streamlined rates – it offers tenant insurance starting at $ 5 per month and home insurance starting at $ 25 per month – resonates strongly with young consumers. It also operates a charitable component called the GiveBack program, where its users select a nonprofit they care about and once a year Lemonade counts the unclaimed money pooled by policyholders who have chosen the. same cause and donates it to the organization. The program was featured in TIME Magazine’s Top 100 Inventions in 2019.
With Lemonade Car, the company said it aims to offer better rates based on how consumers drive.
“The target audience is anyone underserved by the current auto insurance industry,” Wininger told The Times of Israel by email last week. “By setting prices based on how much and how safely you drive, Lemonade Car will be able to deliver better prices – and fairer prices – rather than the way it’s currently done (large proxies like credit scores, age, gender – all parameters that don’t tell how much and how safe you drive). Additionally, we take a look at our current Lemonade customer base – owners, renters, pet owners, etc.
Lemonade Car is the “biggest project the company has ever completed,” said Wininger. “We have assembled entire teams to handle the towing, repairs, bodywork services, as well as the 24/7 roadside assistance and emergency service support that we now offer. Delivering a top-notch auto claims experience means being there for your customers 100% of the time, with surprisingly fast service and a lot of empathy.
The claims process for Lemonade Car will allow users to quickly file a claim, access electric vehicle towing and emergency battery charging services, and track repairs, the company said.
Lemonade is headquartered in New York with offices in Tel Aviv and Amsterdam. The company employs nearly 1,000 people.
Lemonade had raised nearly $ 500 million from leading investors such as SoftBank – its biggest funder – Aleph VC, OurCrowd, Google Ventures and Sequoia Capital, and had one of the most successful IPOs (initial public offerings) in 2020 on the New York Stock Exchange at a valuation of just under $ 2 billion.
It said annual revenue of $ 94 million in 2020 and $ 87.4 million in the first three quarters of 2021, but the company is not yet profitable.