Auto insurer Metromile has attracted $50 million in new investment from a former Uber executive even as it has obtained regulatory approval to formalize a reverse merger deal that will make it a publicly-traded company.
Ryan Graves, Uber’s former senior vice president of global operations, will invest the money into the company both personally and through his investment firm, Saltwater. The investment includes secondary stock purchases and also participation in Metromile’s reverse merger deal with Insu Acquisition Corp. II (Insu II), a special purpose acquisition company.
Metromile, a San Francisco-based insurtech focused on pay-per-mile auto insurance, said on Jan. 29 that it had obtained regulatory sign-offs for the reverse merger (which will also include a PIPE transaction – private investment in public equity), as well as approval from the Delaware Department of Insurance and California Department of Insurance. The deal was first announced in November.
Insu II will hold a special meeting of its stockholders on February 9 to vote on its plans with Metromile. Due to the COVID-19 pandemic, the meeting will be virtual, with holders of Insu II’s Class A and Class B common stock as of Dec. 30, 2020 entitled to vote.
If the acquisition is approved, plans call for closing the acquisition shortly after, at which point Metromile will become a public company.
Metromile founder and Chairman David Friedberg said that Graves will also join Metromile’s board of directors.
Graves joins Chamath Palihapitiya’s Social Capital, Mark Cuban and other institutional investors who will support Metromile’s growth plans as a public company.
A reverse merger offers an alternative to startups seeking to raise additional capital without pursuing an initial public offering. The transaction will give Metromile access to approximately $294 million in cash intended to fuel growth opportunities. Money will also be used to reduce existing debt and expand into new markets and launch new products. Metromile currently writes auto insurance in eight states.
The combined company will be named Metromile, Inc. and is expected to remain listed on NASDAQ under the new ticker symbol “MLE.”
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