US-based digital insurance provider Lemonade filed for a $100m initial public offering yesterday that would enable corporate investors SoftBank, Allianz, XL Catlin and Alphabet to exit.
Lemonade has built an online platform that offers renters and homeowners insurance to US customers, and contents and liability insurance in Germany and the Netherlands. It utilises a smart chatbot instead of human brokers in addition to behavioural economics.
The company almost tripled its revenue year on year to $67.3m in 2019, though its net loss more than doubled to almost $109m. It intends to move into additional types of insurance while continuing to expand internationally.
The offering will follow about $480m in funding, including $300m in an April 2019 series D round led by internet and telecommunications conglomerate SoftBank at a valuation exceeding $2bn.
The round included insurance group Allianz and GV, an investment vehicle for internet and technology group Alphabet, in addition to equity crowdfunding platform OurCrowd and venture capital firms Thrive Capital and General Catalyst.
Another insurer, XL Catlin, provided an amount of funding reported to be about $14m for Lemonade in 2016 through its XL Innovate unit, following $13m from VC firm Sequoia Capital and VC fund Aleph the previous year.
General Catalyst led the company’s $34m series B round later the same year, investing together with GV, XL Innovate, Thrive Capital, Tusk Ventures, Aleph and Sequoia Capital.
All the series B participants returned in 2017 for a $120m series C round led by SoftBank that also featured Allianz and Sound Ventures.
Lemonade has not disclosed details of the size of their respective stakes, but the shareholders that own 5% or more of the company include SoftBank, XL Innovate, Sequoia Capital, Aleph and General Catalyst.
Goldman Sachs, Morgan Stanley and Allen & Company are managing bookrunners for the proposed IPO, which is slated to take place on the New York Stock Exchange.
Barclays Capital is bookrunner for the offering while JMP Securities, Oppenheimer, William Blair and LionTree Advisors are co-managers.
