3 Things – Lemonade / Metromile, Root Q3 & Insurtech Funding

Hi All!  This week we are following the Lemonade / Metromile, Root Q3 & Insurtech funding record breaking.  Here are the three things we learned:


Lemonade Acquires Metromile

The biggest newsmaker for the second week in a row is Lemonade in announcing their acquisition of fellow public insurtech Metromile on the same day as their Q3 earnings report.  The combination of news, one week after launching their auto product, was not well received by investors.  Their growth metrics look impressive but we know that growth is expensive and the $500M they are spending to acquire MILE is a big chunk of the capital they raised with their secondary public offering.  There is skepticism that the book of business may not be worth that amount despite getting them ahead in their auto product development.


Root Q3 Earnings

Root earnings are always an interesting event.  We have been tracking their total loss which is now in excess of $1.15 B.  They focused on telematics changes and spoke about the Carvana embedded product, use of independent agents and lower marketing costs which reduced overall expenses.  The loss ratio is still quite high and stock dragging despite a slight bump from the positive earnings report.


Insurtech Funding Breaks Another Record

Insurtech funding broke a record with $5.3B raised by insurtechs in Q3 2021.  The appetite for investment continues on and US-based companies appears to be on the receiving end of the funding events.  Many deals were early round funding for new entrants and major rounds for cyber / commercial MGA platforms like Coalition.  There is an endless stream of capital to tap into for insurtech businesses.

Thank you for following us, we appreciate your feedback and continued support.  Stay productive, stay safe and stay in touch!