Publicly traded Lemonade has laid off about 60 employees of Metromile, the auto insurer 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 that it was “able to offer a role on Lemonade to approximately 80% of the Metromile team,” but because the deal was a “synergistic” it was able to “work with fewer people.” than is required to employ the two independent organs.” Such reductions in staffing are not unnatural in such business groups, even if it is of little comfort to those in abolished roles.
Metromile itself went public via SPAC (a Special Purpose Acquisition Company) in February of 2021, at a valuation of over $1 billion. At market close on July 27, Metromile’s share price was $1.05, valuing the company at less than $137 million. At one time, Metromile was worth more than $20 per share.
For its part, Lemonade went public via a traditional initial public offering in July of 2020. This company has also seen 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 $1 billion as of the time of writing. Its stock was down 7% by midday Friday and well below its 52-week high of $91.35.
Lemonade announced on July 28 that it was closing its purchase of Metromile, stating that “For less than $145 million in inventory, Lemonade receives more than $155 million in cash, and more than $110 million in auto premiums, and is an insurance entity with 49 licenses government, and accurate data from 500 million car trips.”
Where does layoffs land? On an anonymous professional network, Blind, there were rumors that Metromile’s chief financial officer, senior vice president, and “most of the product, engineering and design teams” had been abandoned. Lemonade did not confirm details about who was affected.
At least one software engineer posted about layoffs on LinkedIn.
Founded in 2011, Metromile launched Pay Per Mile Personal Insurance one year later – one of the first to implement this model. Its struggles in the public market have not proven to be unique. Root and other similar companies also failed to retain their value after going public.