Insurtech company Lemonade today announced that it has filed a registration statement with the US Securities and Exchange Commission (SEC) for an IPO on the NYSE under the LMND ticker. The offering is expected to take place in the coming weeks.
Lemonade was founded in 2015 by Israeli entrepreneurs Shai Wininger and Daniel Schreiber and was chosen as one of "Globes" startups of the year in 2017. The company has raised $480 million to date including a $300 million financing round in 2019 led by Japan's Softbank. Lemonade's planned IPO was reportedly postponed after the failure of WeWork's IPO last year.
Lemonade's prospectus reveals that 2019 revenue was $67.3 million, up 200% from 2018. Revenue totaled $26.2 million in the first quarter of 2020, compared with $11 million in the first quarter of 2019. Marketing and sales expenses represent 50% of the company's expenses and in 2019, Lemonade made a net loss of $108 million - 1.6 times its revenue. Another major expense is reinsurance to reduce risk, representing 25% of its overall expenses of $175 million in 2019.
The prospectus also reveals Lemonade's parties at interest with stakes of more than 5%. These include Softbank, General Catalyst, Sequoia, and Innovate XL. During the company's financing round in 2018 its shares were worth $13.80 while by 2019 each share was worth $42.20. In the last financing round Wininger and Schreiber each sold shares worth $5 million.
Lemonade is an insurance company based on big data and AI. The company began operations in New York in 2016 and has a license to operate in most US states. Last year, Lemonade also entered the European market.
Lemonade claims it can collect 100 times more data than a traditional insurance company and this enables it to be cheaper and more efficient and more precise in pricing policies. Its algorithms also enable it to check policies and prevent fraud and pay out a large number of its claims within seconds of receiving them.
Published by Globes, Israel business news - en.globes.co.il - on June 8, 2020
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