Lemonade Seeks $23 Per Share In IPO

Lemonade Inc., the technology-driven insurance startup, has told regulators that its initial public offering (IPO) is seeking a share price of between $23 to $26. 

In a filing with the Securities and Exchange Commission (SEC) on Thursday (June 25), the company’s revised Form S-1 reported the company will sell 11 million shares to raise from $253 million and $286 million.

With the additional 1.65 million shares that Lemonade plans to offer to its underwriting banks, the New York-based company’s fundraising swells from $291 million to nearly $329 million, TechCrunch reported.  

At those numbers, Lemonade’s valuation ranges from $1.30 billion to $1.47 billion, the report said.

Last year, PYMNTS reported that Lemonade raised $300 million in a Series D round of venture funding led by SoftBank. The other investors included Allianz, General Catalyst, GV, OurCrowd and Thrive Capital.

At the time, the tech startup said it planned to use the proceeds from the capital raise to expand and consider new product lines, such as pet insurance. While Lemonade did not disclose its value with that latest funding, reports put it at $2 billion.

The insurance startup is backed by SoftBank’s 27 percent stake, but the lender has had some bad luck with IPOs losing money, including Uber.

Lemonade, which uses artificial intelligence (AI) chatbots to sell insurance plans, reported a net loss of $108.5 million in 2019, more than double its 2018 losses, according to its SEC filing.

Still, its revenues have soared by more than 200 percent to reach $63.8 million last year, up from $21.2 million in 2018. 

“We have a history of losses and we may not achieve or maintain profitability in the future,” noted Lemonade’s prospectus. “We expect that our net loss will increase in the near term as we continue to make such investments to grow our business.”

Earlier in June, PYMNTS reported that the technology-driven startup had filed its IPO. If successful, the New York-based company will list its shares on the New York Stock Exchange under the symbol “LMND,” the firm said.

“We rely on artificial intelligence and our digital platform to collect data points that we evaluate in pricing and underwriting our insurance policies, managing claims and customer support, and improving business processes,” Lemonade said in its filing.