Israeli digital insurance company Lemonade (NYSE: LMND) has filed to raise $830 million in a secondary offering. The announcement of the secondary offering was announced last night after the market closed on Wall Street with the company's share price rising 14.01% yesterday to $183.26, giving a record high market cap of $10.371 billion. The share price is currently up 1.7% in trading today.
Lemonade's share price has risen 532% since its initial public offering in July 2020 and doubled its value over the past month alone.
Of the $830 million to be raised, $550 million will be for the company to use, an amount that could grow by $120 million should the underwriters exercise their options. $280 million will go to insider shareholders who will sell some of their holdings. Goldman Sachs, Morgan Stanley, Allen & Company, and Barclays Capital are serving as joint active bookrunners. The new funds will be used for general corporate purposes.
Among the shareholders selling shares are cofounder and CEO Daniel Schreiber who is selling 300,000 shares worth about $55 million, General Catalyst is selling 516,000 shares worth $94 million and Harel Insurance Investments and Financial Services Ltd. (TASE: HARL) will sell 459,000 shares, which it bought for $30 million in 2019 and is now selling for $84 million.
Lemonade's other cofounder, president and CTO Shai Wininger is not selling any shares and neither are Softbank, the company's biggest shareholder, Sequoia, Aleph and other investors. After the secondary offering Schreiber will hold 2.7 million shares worth $495 million and Wininger will remain with 3.4 million shares worth $620 million.
Wininger is also one of the two founders of freelance services platform Fiverr (NYSE: FVRR), which held its IPO in 2019 and its share price has since jumped 13-fold and currently has a market cap of $8.7 billion. Wininger's shares in Fiverr are worth over $400 million, so he thus has shares in the two companies he founded worth more than $1 billion.
Lemonade, which was founded in 2015 and raised $319 million at $29 per share and a company valuation of $1.6 billion, after money, last June, is still not profitable. Based on big data, AI algorithms and an online customer interface selling homeowners, renters and pet insurance, Lemonade had revenue of $73.9 million in the first nine months of 2020, 69% up from the corresponding period of 2019. The company recorded a net loss of $88.4 million in the first nine months of 2020, compared with a net loss of $75.8 million over the same period of 2019. Lemonade expects to end 2020 with revenue of $91-93 million.
Published by Globes, Israel business news - en.globes.co.il - on January 12, 2021
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