AssurTech: Lemonade makes a grand entrance on Wall Street

by bold-lichterman

Lemonade, which promises to revolutionize the insurance industry with algorithms using artificial intelligence and big data, quenched its thirst for success with a notable entry Thursday on the New York Stock Exchange, where its stock soared closely. by 140%. Listed under the symbol LMND, the stock ended at $ 69.41 while its IPO price was set at $ 29. At Thursday’s close, Lemonade was worth just over $ 3 billion on the stock market, according to specialist firm Factset. Founded in 2016 by Daniel Schreiber and Shai Wininger, the New York-based company aims to use cutting-edge technological tools to transform the world of insurance by delivering personalized contracts that can be created in minutes.

Lemonade describes itself as “A new kind of insurance company, built from scratch from a digital substrate, a modern business model and without the weight of the past”, in a document sent to the US stock market policeman, the SEC, before it entered Wall Street. The platform currently offers insurance for tenants and owners in the United States as well as civil liability insurance in Germany and the Netherlands. These different services are accessible via a mobile application which is intended to be easy to use and guarantees ultra-fast reimbursement times.

Popular with young people in their thirties

Lemonade is popular with young people in their thirties, who represent 70% of its customers, according to figures provided by the company. 90% of users also claim not to change insurer when joining Lemonade. Another trait likely to make it popular with “millennials”: ​​the group loudly proclaims its commitment to movements for social justice, in particular the recent demonstrations against police violence and racism in the United States.

Lemonade also promotes charitable actions by asking its new clients to designate a non-profit association to which unspent sums are donated once a year. In 2019, $ 600,000 was distributed to around 20 organizations. Among its major shareholders, the company counts the Japanese group Softbank and venture capital firms such as Sequoia Capital and Aleph. The co-founders together hold more than half of the shares. Lemonade generated $ 67.3 million in revenue last year but failed to make a profit, posting losses of $ 108.5 million.