Insurtech company Lemonade has laid off some Metromile employees after closing its acquisition of the company, Lemonade confirmed to Crunchbase News.
Lemonade said around 20% of Metromile’s team was affected. Lemonade is best known for providing homeowners, renters and pet insurance. Metromile focuses on car insurance.
Both companies are fairly new to the public markets. New York-based Lemonade went public in 2020, while San Francisco-based Metromile went public last year in a SPAC deal. Less than a year later, Lemonade announced it would acquire the car insurance provider.
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Metromile struggled as a public company. Although it was valued at $1.3 billion at the time of its SPAC deal, it had a fully diluted value of around $500 million when Lemonade announced acquisition plans, according to Fortune.
The acquisition closed on Thursday, and Lemonade noted in a press release that “most” Metromile employees will transition to roles at Lemonade, including Metromile CEO Dan Preston, who is now Lemonade’s SVP of strategic initiatives.
“We’re thrilled that we’ve finalized our acquisition of Metromile, and that we’ve been able to offer a role at Lemonade to about 80% of the Metromile team,” a Lemonade spokesperson said in a statement to Crunchbase News. “The good-news, bad-news is that this acquisition is synergistic, in that the combined entity is better than the sum of its parts, and can operate with fewer people than were needed to staff the two standalones. This makes the deal compelling to shareholders, but clearly is painful to those who weren’t extended an offer to join Lemonade.”
Layoff numbers grow
More than 32,000 employees of U.S.-based tech companies have been laid off so far this year, according to a Crunchbase News tally. Those employees range from those at early-stage startups to large public companies like Microsoft and Lyft.
Additionally, some companies like Netflix have gone in for their second round of layoffs this summer, after laying off employees earlier this year.
Illustration: Dom Guzman
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