Telecommunications and internet group SoftBank led a $120m series C round for US-based insurance platform developer Lemonade yesterday, investing alongside several other corporates.
GV, a subsidiary of internet and technology conglomerate Alphabet, also took part in the round, as did insurance firms Allianz and XL Catlin, the latter through its XL Innovate unit.
The round was filled out by venture capital firms General Catalyst, Sequoia Capital, Sound Ventures, Thrive Capital and Tusk Ventures, and VC fund Aleph. It valued Lemonade at more than $500m, people familiar with the matter told Bloomberg.
Lemonade runs a digital property and casualty insurance platform that makes use of artificial intelligence and behavioural economics. It pledges no deductible, rate increases or depreciation, a policy it calls Zero Everything.
The company also redistributes a portion of its revenue, taken from a fixed fee for users, to non-profit organisations under a scheme called ‘Giveback’. It is currently licensed in 25 US states, having begun offering cover in New York in late 2016.
David Thevenon, a managing director at SoftBank, will join Lemonade’s board of directors in connection with its investment. He said: “By combining big data and AI with a seamless user experience, Lemonade is truly revolutionising the insurance industry.
“We have been impressed by the team’s creative approach to disrupting the traditional insurance model with innovations like Zero Everything policies and Giveback, and we look forward to supporting the company’s rapid growth.”
Shai Wininger, Lemonade’s co-founder and president, added: “We share SoftBank’s conviction that big data and machine learning are set to profoundly remake our entire industry, and SoftBank has the vision and means to enable this common vision to become a reality.”
Lemonade has now raised about $180m since it was founded in 2015. General Catalyst led its last round, a $34m series B in December 2016 that included GV, Thrive Capital, Tusk Ventures and existing backers XL Innovate, Aleph and Sequoia Capital.
XL Innovate had previously made a “significant” investment in the company in August 2016 that could have been up to $14m in size.
– Photo courtesy of Lemonade Inc.