Lemonade, the US-based online insurance provider backed by corporate investors Alphabet, SoftBank, Allianz and XL Catlin, is going public today in a $319m initial public offering.
The offering consists of 11 million shares priced at $29.00 each that will be issued on the New York Stock Exchange. The company initially set a range of $23 to $26 for the IPO before increasing that to $26 to $28 earlier this week.
One of Lemonade’s shareholders, investment manager Baillie Gifford, has expressed interest in buying up to $100m of shares in the offering but has not confirmed whether it will do so. The IPO price values the company at more than $1.9bn.
Founded in 2015, Lemonade offers property and casualty insurance through an online platform that utilises bots instead of human brokers, using artificial intelligence and behavioural economics to combat fraud.
The company is present in the US, UK and Germany, and it more than doubled revenue year on year to $26.2m in the first quarter of this year, though its net loss rose from $21.6m to $36.5m in the same period.
Lemonade was valued at more than $2bn in its last round, a $300m series D led by internet and telecommunications conglomerate SoftBank in April 2019 that boosted its overall funding to $480m.
Internet and technology group Alphabet’s GV unit also took part in the round, as did insurance firm Allianz, OurCrowd, General Catalyst and Thrive Capital.
SoftBank also led a $120m series C round for Lemonade in late 2017 that also featured Allianz, GV, insurance firm XL Catlin’s XL Innovate unit, Thrive Capital, General Catalyst, Sequoia Capital, Sound Ventures, Tusk Ventures and Aleph.
The company secured $34m in a 2016 series B round led by General Catalyst and backed by GV, XL Innovate, Thrive Capital, Tusk Ventures, Aleph and Sequoia Capital. The latter two were existing investors, as was XL Innovate, which had supplied a reported $14m earlier the same year.
Lemonade’s largest shareholder, SoftBank, had a 27.3% stake that was cut to 21.8% in the offering. Aleph and Sequoia Capital each own 8.3% post-IPO while General Catalyst holds 5.9% and XL Innovate 4.2%.
Goldman Sachs, Morgan Stanley and Allen & Company are managing bookrunners for the IPO while Barclays is also a bookrunner and JMP Securities, Oppenheimer, William Blair and LionTree are co-managers.
The underwriters have the 30-day opportunity to acquire up to 1.65 million additional shares, which would increase the size of the offering to nearly $367m.
