Car insurance startup Metromile has secured a $90 million Series E co-led by a pair of insurance companies: Japan’s Tokio Marine Holdings and Canada’s Intact Financial.
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The San Francisco company plans to use the new funds to continue the expansion of its pay-per-mile insurance nationwide and incorporate the use of artificial intelligence (AI) in claims processing. Metromile is currently available in eight states: Arizona, California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia, and Washington.
Since its inception, Metromile has raised nearly $300 million in funding. The latest round included participation from existing and new investors NEA, Index Ventures, Future Fund and Section 32—which was founded by former Google Ventures CEO Bill Maris.
The premise behind Metromile is that if you don’t drive much, you shouldn’t have to pay as much for auto insurance as those who do drive a lot. Customers pay a base rate, and then pennies per mile, according to the company’s website.
Dan Preston, CEO of Metromile, said the new funds will give the company the ability to advance its use of sensors and automation. The company claims that its AI claims system, called AVA, is the first of its kind system designed to accelerate the process of verifying and paying out insurance claims.
Metromile says the data it is able to extract gives it the ability to reconstruct the scene of an accident to instantly determine if claim details are accurate. The company claims to automatically approve payments once a claim is verified.
“Metromile is truly transforming the insurance industry with their technological infrastructure that combines machine learning and data to build the most seamless customer experience,” said Makoto Okada, group chief digital officer of Tokio Marine Holdings, in a written statement.
In conjunction with the latest funding round, former Intel CFO and director of corporate strategy Stacy Smith has also been tapped to serve as an independent director of the company.
Metromile has competitors that are also attracting venture interest.
In March, Columbus-based auto insurance provider Root Insurance raised a $51 million Series C. California-based Redpoint Ventures led that round, with participation by Scale Venture Partners, Ribbit Capital, and Silicon Valley Bank.
Update: Metromile got back to us after publication. Here’s what they told us: Metromile doesn’t share revenue or growth or gross margin figures, but the company does have 248 employees and has now raised $295 million in total. Notably, the firm also answered our question asking what is stopping major insurance providers from adopting its model. The firm noted that for traditional insurers, “[l]ow-mileage customers […] subsidize the cost of the losses generated from high-mileage/high-risk drivers.” And as, per Metromile, the “pay-per-mile” method of selling insurance “is not cost-effective for high-mileage drivers,” it wouldn’t pencil out.
So, don’t expect your current provider to offer you a pay-per-mile option any time soon.
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