Lemonade, Inc.


Lemonade Insurance Company is an American property and casualty insurance company headquartered in New York City offering renters and home insurance policies for homes, apartments, co-ops and condos in many US states in addition to content and liability policies in Germany and the Netherlands.
Lemonade delivers insurance policies and handles claims through desktop and mobile apps using chatbots. Its business model includes giving underwriting profits to nonprofits of the customers’ choice. This is done annually in an event Lemonade calls “Giveback”.
Lemonade Inc. is backed by investors including Aleph, Sean Grusd, General Catalyst, GV, Sequoia Capital, Thrive Capital, XL, and Japanese tech investor SoftBank, having raised $120 million as of December 2017.
Lemonade is publicly traded on the New York Stock Exchange under the ticker symbol LMND.

History

Lemonade was founded by Daniel Schreiber and Shai Wininger, in April 2015. Dan Ariely joined in 2017 as the Chief Behavioral Officer at Lemonade.

Funding

In December 2015, Lemonade Inc. announced that it secured $13 million in seed funding from Sequoia Capital and Aleph. In August 2016, Lemonade Inc. raised $13 million in funding from XL Innovate, followed by a $34 million Series B funding round in December of the same year. The Series B round was led by General Catalyst with participation from Thrive Capital, Tusk Ventures, and GV, the VC arm of Google's parent company Alphabet Inc.
In April 2017, the company announced additional investors: Allianz SE and Ashton Kutcher’s Sound Ventures. In December 2017, Softbank invested an additional $120 million in Lemonade in a Series C round, increasing the total money raised by the company to around $180 million. In April 2019, Lemonade announced a further $300 million investment in a Series D financing led by the SoftBank Group, with participation from Allianz, General Catalyst, GV, OurCrowd, and Thrive Capital, increasing the total money raised by the company to $480 million.

Financials

Lemonade underwrites its own policies and is reinsured at Lloyd’s of London. In 2020, Ohio-based financial analysis firm Demotech rated Lemonade’s financial stability as A-Exceptional.

Initial Public Offering

On June 8, 2020, Lemonade filed an S-1 form for registration of securities in preparation for an Initial public offering.
On July 1, 2020, Lemonade Inc. priced 11 million shares at $29.00 per share on the NYSE. Shares began trading on July 2, 2020 under the ticker symbol LMND.

Business model

Lemonade’s business model differs from that of typical insurance companies in that it keeps a flat 25% fee of a customer’s premium while setting aside the remaining 75% to pay claims and purchase reinsurance. Unclaimed premiums go to a nonprofit of the user’s choosing in an annual “Giveback.”

Technology

Lemonade uses chatbots to provide insurance policies and handle claims. In 2016, a customer filed a claim for a stolen coat; after answering a few questions on the app and recording a report on their iPhone, Lemonade's claims bot set a world record by reviewing, approving and paying the claim in three seconds.

Social good

Lemonade Inc. which is registered as a public benefit corporation, has a stated mission of ‘transforming insurance from a necessary evil into a social good." Upon signing up for Lemonade, users select a nonprofit or charity that will receive payouts on an annual basis from the unclaimed premiums of their respective cohort.
In May 2016, Lemonade became one of the only insurance companies to receive B-Corporation certification.