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Pay-per-mile auto insurer Metromile is heading to public markets via SPAC

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Metromile, the pay-per-mile auto insurer that earlier this year laid off a third of its staff due to economic uncertainties caused by COVID-19, is taking the SPAC path to the public markets.

The company, which was founded in 2011 and is led by CEO Dan Preston, said it has reached a merger agreement with special purpose acquisition company INSU Acquisition Corp. II, with an equity valuation of $1.3 billion.

Metromile said it was able to raise $160 million in private investment in public equity, or PIPE, in an investment round led by Chamath Palihapitiya’s firm Social Capital. Existing investors Hudson Structured Capital Management and Mark Cuban, as well as new backers Miller Value and Clearbridge participated. Metromile will have about $294 million of cash at closing.

The company plans to use those proceeds to reduce existing debt and accelerate growth, specifically to hire employees to support its consumer insurance and enterprise businesses, and grow beyond its eight-state geographic footprint to a goal of 21 states by the end of next year and nationwide coverage by the end of 2022.

Metromile is credited for disrupting some of the inefficiencies of the auto insurance business model, notably how consumers are charged. Instead of a standard flat fee, Metromile charges customers based on their mileage, which it is able to measure via a device plugged into the vehicle. Some two-thirds of U.S. drivers are considered low-mileage, according to Metromile. By charging per mile, Metromile says its customers save 47% on average compared to their previous insurer.

The company developed a mobile app, which besides allowing users to file claims, offers other features such as alerting the driver of possible parking violations due to street sweeping activity. Now, with three billion miles of driver data, the company is able to make predictive models that help lower customer costs and improve their overall experience.

The company also built out an enterprise division in 2019 that offers a cloud-based software as a service to large legacy insurers. Metromile licenses components of its platform, including claims automation and fraud detection tools.

The COVID-19 pandemic created initial headwinds for Metromile, which had been one of the fastest-growing startups in the Bay Area. Metromile ended up laying off about 100 people as it aimed to pare back its workforce. The company said at the time that its business was affected by pandemic-related stay-at-home orders, which caused its customers to drive less. The pandemic also prompted U.S. drivers to shop around for insurance and look for deals that supported their shift to lower mileage.

Investor Cuban said in the company’s SPAC announcement sees an upside for the business.

“During these times of financial hardship, unemployment and work from home, Metromile provides an important insurance alternative,” Cuban said. “The option to pay for insurance by the mile is a game changer and why I’m incredibly excited about Metromile’s future!”

Social Capital’s Palihapitiya is equally bullish on the company, tweeting Tuesday “Buffett had Geico. I pick @Metromile.”

Metromile has hired back staff and returned employees that it placed on furlough this spring. Today, the company has more than 230 employees and doesn’t expect any reductions in the workforce in the future. Instead, the company told TechCrunch it plans to hire additional staff on the expectation that both its consumer and enterprise businesses will grow “considerably” in the next few years.

The transaction is expected to close in the first quarter of 2021. The combined company will be named Metromile Inc., and is expected to remain listed on NASDAQ under the new ticker symbol “MLE.”

Lyron Foster is a Hawaii based African American Musician, Author, Actor, Blogger, Filmmaker, Philanthropist and Multinational Serial Tech Entrepreneur.

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Elon Musk says Tesla Semi is ready for production, but limited by battery cell output

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Tesla CEO Elon Musk said on the company’s 2020 Q4 earnings call that all engineering work is now complete on the Tesla Semi, the freight-hauling semi truck that the company is building with an all-electric powertrain. The company expects to begin deliveries of Tesla Semi this year, the company said in its Q4 earnings release, and Musk said the only thing limiting their ability to produce them now is the availability of battery cells.

“The main reason we have not accelerated new products – like for example Tesla Semi – is that we simply don’t have enough cells for it,” Musk said. “If we were to make the Semi right now, and we could easily go into production with the Semi right now, but we would not have enough cells for it.”

Musk added that the company does expect to have sufficient cell volume to meet its needs once it goes into production on its 4680 battery pack, which is a new custom cell design it created with a so-called ‘tables’ design that allows for greater energy density and therefore range.

“A Semi would use typically five times the number of cells that a car would use, but it would not sell for five times what a car would sell for, so it kind of would not make sense for us to do the Semi right now,” Musk said. “But it will absolutely make sense for us to do it as soon as we can address the cell production constraint.”

That constraint points to the same conclusion for the possibility of Tesla developing a van, Musk added, and the lifting of the constraint will likewise make it possible for Tesla to pursue the development of that category of vehicle, he said.

Tesla has big plans for “exponentially” ramping cell production, with a goal of having production capacity infrastructure in place for a Toal of 200 gigawatt hours per year by 2022, and a target of being able to actually produce around 40% of that by that year (with future process improvements generating additional gigawatt hours of cell capacity  in gradual improvements thereafter).

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Pro-Trump Twitter figure arrested for spreading vote-by-text disinformation in 2016

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The man behind a once-influential pro-Trump account is facing charges of election interference for allegedly disseminating voting disinformation on Twitter in 2016.

Federal prosecutors allege that Douglass Mackey, who used the name “Ricky Vaughn” on Twitter, encouraged people to cast their ballot via text or on social media, effectively tricking others into throwing away those votes.

According to the Justice Department, 4,900 unique phone numbers texted a phone number Mackey promoted in order to “vote by text.” BuzzFeed reported the vote-by-text scam at the time, noting that many of the images were photoshopped to look like official graphics from Hillary Clinton’s presidential campaign.

Some of those images appeared to specifically target Black and Spanish-speaking Clinton supporters, a motive that tracks with the account’s track record of white supremacist and anti-Semitic content. The account was suspended in November 2016.

At the time, the mysterious account quickly gained traction in the political disinformation ecosystem. HuffPost revealed that the account was run by Mackey, the son of a lobbyist, two years later.

“… His talent for blending far-right propaganda with conservative messages on Twitter made him a key disseminator of extremist views to Republican voters and a central figure in the alt-right’ white supremacist movement that attached itself to Trump’s coattails,” HuffPost’s Luke O’Brien reported.

Mackey, a West Palm Beach resident, was taken into custody Wednesday in Florida.

“There is no place in public discourse for lies and misinformation to defraud citizens of their right to vote,” Acting U.S. Attorney for the Eastern District of New York Seth D. DuCharme said.

“With Mackey’s arrest, we serve notice that those who would subvert the democratic process in this manner cannot rely on the cloak of Internet anonymity to evade responsibility for their crimes.”

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Tesla is willing to license Autopilot and has already had “preliminary discussions” about it with other automakers

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Tesla is open to licensing its software, including its Autopilot highly-automated driving technology, and the neural network training it has built to improve its autonomous driving technology. Tesla CEO Elon Musk revealed those considerations on the company’s Q4 earnings call on Wednesday, adding that the company has in fact already “had some preliminary discussions about licensing Autopilot to other OEMs.”

The company began rolling out its beta version of the so-called ‘full self-driving’ or FSD version of Autopilot late last year. The standard Autopilot features available in general release provide advanced driver assistance (ADAS) which provide essentially advanced cruise control capabilities designed primarily for use in highway commutes. Musk said on the call that he expects the company will seek to prove out its FSD capabilities before entering into any licensing agreements, if it does end up pursuing that path.

Musk noted that Tesla’s “philosophy is definitely not to create walled gardens” overall, and pointed out that the company is planning to allow other automakers to use its Supercharger networks, as well as its autonomy software. He characterized Tesla as “more than happy to license” those autonomous technologies to “other car companies,” in fact.

One key technical hurdle required to get to a point where Tesla’s technology is able to demonstrate true reliability far surpassing that of a standard human driver is transition the neural networks operating in the cars and providing them with the analysis that powers their perception engines is to transition those to video. That’s a full-stack transition across the system away from basing it around neural nets trained on single cameras and single frames.

To this end, the company has developed video labelling software that has had “a huge effect on the efficiency of labeling,” with the ultimate aim being enabling automatic labeling. Musk (who isn’t known for modesty around his company’s achievements, it should be said) noted that Tesla believes “it may be the best neural net training computer in the world by possibly an order of magnitude,” adding that it’s also “something we can offer potentially as a service.”

Training huge quantities of video data will help Tesla push the reliability of its software from 100% that of a human driver, to 200% and eventually to “2,000% better than the average human,” Musk said, while again suggesting that it won’t be a technological achievement the company is interested into keeping to themselves.

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