Metromile Accelerates Toward Public Markets with $1.3B SPAC Merger
Pay-per-mile auto insurance disruptor Metromile is making waves in the financial world by announcing its transition to public markets through a SPAC merger with INSU Acquisition Corp. II. The deal values the innovative insurer at $1.3 billion in equity, marking a significant milestone for the 9-year-old company.
Key Financial Highlights
- $160 million raised in PIPE investment led by Social Capital (Chamath Palihapitiya)
- Participation from notable investors including Mark Cuban and Miller Value
- $294 million in total cash expected at closing
- Planned NASDAQ listing under ticker symbol “MLE” (Q1 2021 expected)
Strategic Growth Plans
Metromile plans to deploy these funds to:
- Reduce existing debt
- Expand from 8 states to 21 states by end of 2021
- Achieve nationwide coverage by 2022
- Scale both consumer and enterprise business divisions
- Increase hiring (currently 230+ employees with no planned reductions)
The Metromile Difference: Disrupting Auto Insurance
What sets Metromile apart in the crowded insurance market?
- Pay-per-mile model: Customers save 47% on average versus traditional insurers
- Proprietary technology: Plug-in device accurately tracks mileage
- Mobile app ecosystem: Features include claims filing and parking violation alerts
- Data advantage: 3 billion miles of driving data enables predictive cost modeling
Enterprise Expansion
Since launching its enterprise division in 2019, Metromile has been licensing its:
- Claims automation platform
- Fraud detection tools
- Cloud-based SaaS solutions to legacy insurers
Pandemic Challenges and Recovery
Like many companies, Metromile faced COVID-19 headwinds:
- Laid off ~100 employees (33% of workforce) in early 2020
- Experienced reduced customer mileage during lockdowns
- Has since rehired staff and brought back furloughed employees
Investors remain bullish about Metromile’s future. Mark Cuban stated:
“During these times of financial hardship, unemployment and work from home, Metromile provides an important insurance alternative. The option to pay for insurance by the mile is a game changer.”
Social Capital’s Chamath Palihapitiya echoed this sentiment, drawing parallels to Warren Buffett’s GEICO investment.
The Road Ahead
With its innovative model and fresh capital infusion, Metromile is positioned to:
- Expand its geographic footprint significantly
- Enhance its technology platform
- Grow both consumer and enterprise revenue streams
- Potentially redefine auto insurance standards nationwide
The SPAC merger represents both validation of Metromile’s business model and an opportunity to accelerate its mission of making auto insurance more fair and affordable for low-mileage drivers.
