Banking & Finance

Lemonade Gears Up for IPO

Lemonade has filed an S-1 form with the U.S. Securities and Exchange Commission (SEC) regarding its initial public offering (IPO). No terms for the IPO have been released, but the offering is valued up to $100 million, although this number is usually just a placeholder. The company intends to list its shares on the New York Stock Exchange under the symbol LMND.

The underwriters for the offering are Goldman Sachs, Morgan Stanley, Allen, Barclays, JMP Securities, Oppenheimer, William Blair and LionTree.

Lemonade is an insurance company that is looking to leverage technology, data, artificial intelligence, contemporary design and behavioral economics. This company offers homeowners and renters insurance in the United States, as well as contents and liability insurance in Germany and the Netherlands, through its full-stack insurance carriers.

The goal for this company is to replace brokers and bureaucracy with bots and machine learning, aiming for zero paperwork and instant everything. Lemonade gives excess premiums to nonprofits selected by its community during its annual Giveback. Lemonade is currently available for most of the United States, Germany and the Netherlands.

The company described its financials in the filing as follows:

Since our launch in late 2016, our gross written premium (“GWP”) grew from $9 million in 2017, to $47 million a year later, and to $116 million in 2019. For the three months ended March 31, 2020, our GWP was $38 million. In parallel, our net losses per dollar of GWP dropped from over $3 in 2017 to under $1 both in 2019 and for the three months ended March 31, 2020. Our revenue was $2 million, $23 million, and $67 million in 2017, 2018 and 2019, respectively, and our net losses were $28 million, $53 million, and $109 million, respectively. For the three months ended March 31, 2020, our revenue was $26 million and our net losses were $37 million.

Lemonade intends to use the net proceeds from this offering for general corporate purposes, including working capital, operating expenses and capital expenditures.