How will investors value MetroMile and Oscar Health?

Last night, MetroMile and SPAC INSU Acquisition Corp. II completed their combination, putting the per-mile auto insurance startup up for regular trading today for the first time.

In the wake of last year’s debuts by neoinsurance companies Lemonade and Root, it’s not surprising to see others test the public markets. For example, Oscar Health recently announced its intention to go public via a traditional IPO.

How the new entrants will fare, however, is not clear.

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There is something of a tale of two companies in Lemonade and Root, with the pair valued at divergent multiples and sporting very different post-IPO trajectories, at least concerning their value.

While Lemonade has appreciated greatly from its IPO price ($29) to its current value ($155.33), Root’s share price dropped from its debut ($27) to today ($21.75).

This morning, as MetroMile starts its life as a public company, Oscar Health preps its own run at an IPO and other neoinsurance players like Hippo wait in the wings, let’s quickly check the difference between how Root and Lemonade have fared, and then ask what we can learn from their different valuation multiples and what they might mean for the next startup insurance players hoping to go public while the IPO window is wide open.

Root, Lemonade

Lemonade’s path to the public markets was one that started modestly with its first IPO pricing, (Read more...)