Metromile Inc., a San Francisco based car insurance start-up, is set to become a public company via an $842 million combination with INSU Acquisition Corp. II, a special purpose acquisition company (SPAC) sponsored by Cohen & Company.
Cohen & Co’s acquisition vehicle completed its initial public offering back in September, raising $230 million.
Now, INSU II has entered into a definitive business combination with Metromile that will inject the insurtech with $294 million of cash to use for debt reduction and growth initiatives.
In connection with the transaction, investors led by Social Capital, and including Hudson Structured Capital Management Ltd., doing its re/insurance business as HSCM Bermuda (HSCM), Miller Value, Clearbridge and Mark Cuban, have committed to invest $160 million in a private purchase of INSU II Class A common stock.
Metromile hopes to expand to 49 US states by the end of 2022 and is targeting $1 billion of premium run-rate by the end of 2024. Following the transaction with INSU II, the firm will continue to be led by CEO Dan Preston.
“We are excited to bring our vision of transforming the auto insurance industry to the public markets by partnering with Daniel Cohen and the team at INSU II, whose deep experience in the insurtech space will help propel Metromile to the next level,” said Preston.
“Today’s announcement launches Metromile’s new chapter in delivering the fairest, most individualized auto insurance. As a public company, we expect to use our strengthened balance sheet to accelerate our growth, bring Metromile nationwide, and scale rapidly toward sustained profitability. The era of fixed price auto insurance is coming to an end.”
Daniel Cohen, Chairman of the Board of Directors of INSU II, also commented: “The massive U.S. auto insurance industry has been inefficient and ripe for disruption for decades, and Metromile’s technology platform provides a clear competitive advantage over the legacy carriers, positioning them at the forefront of the revolution they founded.”
“Led by visionary technologists and complemented by the best veterans from top insurance carriers, Metromile has built a digital auto insurer with compelling and durable unit economics. The team has created a distinct offering that vastly differentiates Metromile in the marketplace.”
