Publicly listed Lemonade has laid off about 60 employees from Metromile, the auto insurance company it recently acquired, adding to the volatility the tech sector has seen over the past 18 months.
In an emailed statement, a Lemonade spokesperson told TechCrunch it was “able to offer a role at Lemonade to approximately 80% of the Metromile team,” but as the deal was “synergically”, it is able to “operate with fewer people than needed to staff the two autonomously. Such staff reductions are not abnormal in such business combinations, even if it is not hardly comforting for those who occupy the abolished posts.
Metromile itself went public through a SPAC (Special Purpose Acquisition Company) in February 2021, with a valuation of over $1 billion. At market close on July 27, Metromile shares were trading at $1.05, valuing the company at just under $137 million. At one point, Metromile was worth over $20 per share.
For its part, Lemonade went public via a traditional IPO in July 2020. This company also saw its value erode from just over $188 per share at one point to $18.40 per share, giving it a valuation of around $1.1 billion at the time. From writing. Its stock was down 7% at midday Friday and significantly below its 52-week high of $91.35.
Lemonade announced on July 28 that it had completed its purchase of Metromile, noting that “In exchange for less than $145 million in stock, Lemonade receives over $155 million in cash, over $110 million in bonus automobiles, an insurance entity with 49 state licenses, and precision data on 500 million car trips.
Where have the layoffs gone? On the anonymous business network, Blind, there were rumors that Metromile’s chief financial officer, a senior vice president, and “most of the product, engineering and design teams” had been fired. Lemonade has not confirmed details of who was affected.
At least one software engineer has posted information about the layoffs on LinkedIn.
Founded in 2011, Metromile launched its personalized pay-per-kilometre car insurance a year later – one of the first companies to apply this model. His struggles in the public market did not prove unique; Root and other similar companies also failed to hold their value after going public.