SoftBank-backed Lemonade raises IPO target to $319M

Implied market value still short of last year’s $2.1B valuation

Lemonade co-founders Daniel Schreiber and Shai Wininger
Lemonade co-founders Daniel Schreiber and Shai Wininger

As its anticipated early July IPO date draws nearer, home insurance provider Lemonade is raising its share price once again.

A new filing from the SoftBank-backed insurer says that it will sell 11 million shares at $29 apiece, Bloomberg reported. The company had previously raised its price range to $26 to $28 from an earlier target of $23 to $26.

The new share price would raise $319 million and give Lemonade a market value of $1.6 billion, closer to but still significantly short of the $2.1 billion valuation the firm reported in 2019 after a $300 million funding round led by SoftBank.

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Masoyoshi Son’s firm will own a 21.8 percent stake in Lemonade after the IPO, according to the filing. Other backers of the New York-based firm, which has 123 full-time employees in Israel, include Sequoia Capital Israel and General Catalyst.

The insurer has ambitions to disrupt the insurance old guard, including firms like Allstate, State Farm, Progressive, Berkshire Hathaway and Liberty Mutual, but has yet to turn a profit. The company lost $108 million in 2019, and reported a $36.5 million net loss for the first quarter of 2020.

Lemonade offers insurance policies via an artificial intelligence-powered mobile app, and purports to be able to prevent fraud among its customers by donating leftover funds to charity — a theory of behavioral economics that it admits is “untested” in its SEC filings. [Bloomberg] — Kevin Sun