Lemonade, a startup that sells insurance to renters and homeowners (not to be confused with the Beyoncé album and film), filed for an IPO on the New York Stock Exchange today, estimating it will raise about $100 million. VCs estimated its current valuation at $2.1 billion, making it another potential unicorn.
The startup has positioned itself as a disruptor in the fintech and insurance market for its combined use of AI and behavioral science that aimed to not only approve claims in three seconds but also to combat fraudulent claims by making its clients sign an “honesty pledge.”
Lemonade is also a certified B Corp—its added layer of philanthropy is a measure against fraud, it says. As a previous report in Fast Company noted, “If customers are invited to direct leftover premium payments toward a nonprofit of their choice, or so the thinking goes, they will be less likely to cheat on their claims (surveys suggest that one in four Americans would pad a claim with no compulsion).”
Lemonade says it intends to trade under the NYSE ticker symbol LMND.
The company has raised some $480 million in investments, $300 million of which came from SoftBank. Other investors include General Catalyst and Tusk Venture Partners. Its SEC filing revealed that Lemonade posted a net loss of $108.5 million in 2019, which was more than double the loss in 2018. But revenue during that time rose from $21.2 million to $63.8 million.
Perhaps that’s why the company is confident it can take its place in the same league as established players such as Allstate and Travelers, among others. “Approximately 70% of our current customers are under the age of 35, and about 90% of our customers said they were not switching from another carrier,” according to a company statement. “We have achieved this outsized share among newer cohorts through a three-pronged consumer value proposition.”