Insurtech company Lemonade last night announced the pricing of its IPO. The company offered eleven million shares at $29 per share for a total of $319 million, at a valuation of $1.6 billion, after money - well up from the price range of $23-26 in its prospectus last week. The new shares will represent 20% of the company.
Lemonade has granted the underwriters a 30-day option to purchase up to an additional 1,650,000 shares of its common stock at the initial public offering price.
Lemonade says that its shares will begin trading on the New York Stock Exchange later today under the ticker symbol "LMND," and the offering is expected to close on July 7, 2020, subject to customary closing conditions.
Goldman Sachs & Co. LLC, Morgan Stanley and Allen & Company LLC are acting as the managing bookrunners for the offering. Barclays is acting as a bookrunner. JMP Securities, Oppenheimer & Co., William Blair and LionTree are acting as co-managers for the offering.
Despite upsizing the offering, the insurtech company's valuation still falls short of the reported valuation of closer to $2 billion when Lemonade raised $300 million in an equity financing round led by Softbank in April 2019.
Lemonade was founded in 2015 in Israel by entrepreneurs Shai Wininger and Daniel Schreiber and has been licensed to operate in the US insurance market since 2016. The company has raised $480 million to date with Japan's Softbank being its biggest investor.
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. The company currently focuses on the home insurance market in the US but it also entered several European markets last year.
Published by Globes, Israel business news - en.globes.co.il - on July 2, 2020
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