Insurance institution Lemonade said precocious Monday it has agreed to bargain Metromile successful an all-stock deal, a bid to jumpstart its auto-insurance concern that sent shares of Metromile surging 7% higher successful after-hours trading.
The woody would worth Metromile MILE, +2.60% astatine astir $500 million, Lemonade LMND, +1.40% said. Under the presumption of the deal, Metromile shareholders volition person Lemonade communal shares astatine a ratio of 19 to 1.
Lemonade launched its car security past week, and Metromile’s proprietary information and algorithms “can vault america implicit the astir time- and cost-intensive parts of the journey,” Lemonade’s Chief Executive and co-founder Daniel Schreiber said successful a statement. “In a immense and competitory marketplace similar car insurance, today’s woody is simply a immense unlock of worth for our customers and shareholders.”
Lemonade has been astatine the forefront of utilizing “big information and AI successful location and favored insurance,” portion Metromile has gone done “a parallel way for car insurance,” Lemonade said.
Metromile’s car-mounted sensors person covered billions of miles, cross-referencing the information streams with claims information and yielding “precise predictions” for losses per mile driven, Lemonade said.
The woody is expected to adjacent successful the 2nd 4th of 2022, pending regulatory approvals. Shares of Lemonade fell 6% successful the extended session.
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