Softbank-backed fintech unicorn Lemonade recently announced that it has filed for an Initial Public Offering on the New York Stock Exchange (NSE) for an indeterminate amount. The company estimates that it will be able to raise $100mn. Several venture capitalists have estimated that the company is worth $2.1bn currently in valuation.
The company says it’s rebuilding insurance from the ground up on a digital substrate and an innovative business model. As per an SEC filing, revenue of $26.2mn and a net loss of $36.5mn was generated for quarter one of FY20. The company intends to trade under the NYSE ticker symbol LMND.
The startup has positioned itself in such a way with the combined use of AI and behavioral science that it has become a disruptor in the fintech and insurance market .The company aimed to not only approve claims in three seconds but also to combat fraudulent claims by making its clients sign an “honesty pledge.”
The company from the beginning was eyeing to tap the younger generation for its business growth. “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. We have achieved this outsized share among newer cohorts through a three-pronged consumer value proposition,” notes the company.
So far the company has raised some $480mn in investments, $300mn of which came from SoftBank. Other investors include General Catalyst and Tusk Venture Partners. It will be surprising to see how the company fares at the IPO considering the past IPO debacles of Softbank-backed startups like Uber and WeWork.
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