Insurtech Lemonade laid off some Metromile employees after completing its acquisition of the company, Lemonade confirmed to Crunchbase News.
Lemonade said about 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 relatively new to the public markets. New York-based Lemonade went public in 2020, while San Francisco-based Metromile went public last year under a SPAC deal. Less than a year later, Lemonade announced that it would acquire the car insurance provider.
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Metromile has 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 move into roles at Lemonade, including Metromile CEO Dan Preston, who is now senior vice president of Lemonade’s strategic initiatives.
“We are delighted to have completed our acquisition of Metromile and to have been able to offer a position at Lemonade to approximately 80% of the Metromile team,” a Lemonade spokesperson said in a statement to Crunchbase News. “The good news, the 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 necessary to staff the two stand-alone entities. This makes the deal attractive to shareholders, but is clearly painful for those who did not receive an offer to join Lemonade.
The number of layoffs is increasing
More than 32,000 employees of US-based tech companies have been laid off so far this year, according to a tally by Crunchbase News. These employees range from early-stage startups to large public companies like Microsoft and Lyft.
Additionally, some companies like Netflix went through their second round of layoffs this summer, after laying off employees earlier this year.
Illustration: Dom Guzman
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