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 has 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.
Along with the public company plans, Metromile founder and Chairman David Friedberg said that Graves’ investment is an added bonus. (Graves will also join Metromile’s board of directors.)
Graves “has a remarkable reputation as an energetic and thoughtful business builder,” Friedberg said in prepared remarks. “As Metromile accelerates growth and scale, [Graves’] partnership will be immensely valuable to our board and management team.”
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 accelerate growth initiatives, including expanding into new markets, increasing partnership and launching new products and features.
The combined company will be named Metromile, Inc. and is expected to remain listed on NASDAQ under the new ticker symbol “MLE.”