Metromile Going Public: Reverse merger with INSU Acquisition Corp. II

By Aebjohn Tomas (University of Chicago), Rahul Mepani, Sung Cho, Suchritha Patlolla, Kevin Hwang and Athean Myat (Cornell University)


Overview of the deal

Acquirer: INSU Acquisition Corporation II

Target: Metromile

Transaction Size: $956 Million

Implied Pro Forma Market Capitalisation: $1.3 Billion

Anticipated Close Date: Q1 2021 (Ticker: MLE)

Transaction Advisors:

  • J.P. Morgan is serving as the exclusive financial advisor to Metromile

  • J.P. Morgan, Wells Fargo, and Allen & Company are the exclusive placement agents to INSU II

Warren Buffet had Geico. Chamath now has Metromile. The pay-per-mile automotive insurer is going public via a reverse merger with the Special Purpose Acquisition Company, INSU Acquisition Corporation II (NASDAQ: INAQ). The company should join the NASDAQ, under the ticker MLE, by the first quarter of 2021.

The automotive insurance industry has long been economically inefficient as coverage policies have notoriously mispriced the risk associated with driving. Actuaries have historically utilized group-based statistics like age, gender, and marital status to model one’s projected risk behind the wheel. In turn, consumers have overpaid for coverage plans that do not reflect their respective driving tendencies such as when they drive and how often they drive. Leveraging data science to deliver a dynamic usage-based insurance pricing mechanism, Metromile claims to generate, on average, 47% in cost savings for users over incumbents such as Geico and Progressive.

Leading the PIPE is Social Capital’s Chamath Palihapitiya, the long term-focused technology investor who is largely credited for bringing back the popularity of the SPAC model, and a notable friend of Metromile’s co-founder, David Freidberg. Chamath is joined by angel investor and Dallas Mavericks owner Mark Cuban, as well as investment firms Miller Value, Clearbridge, and New Enterprise Associates.

Company Details: MetroMile

- Founded in 2011 headquartered in San Francisco

- Chairman and Founder: David A. Friedberg (Founder)

- CEO/CIO: Dan Preston (CEO)