SoftBank-backed online insurer Lemonade has reportedly postponed an initial public offering (IPO) of shares due to market jitters stemming from the failed IPO of WeWork, also backed by the Japanese multinational.
According to a report by Business Insider, which cites people familiar with the matter, Lemonade, founded by Israeli entrepreneurs Shai Wininger and Daniel Schreiber, has decided to delay its share listing which would have reportedly valued the firm at $2 billion, because of concerns of a chilly investor reception.
Earlier this month, the Japanese giant SoftBank Group suffered an operating loss of $6.4 billion in the second quarter, as investments in startups such as WeWork and Uber took a massive hit. In October, SoftBank confirmed it was injecting billions of dollars into WeWork. The shared-workspace startup went from an investor darling to canceling its IPO and seeing its Israeli-American co-founder Adam Neumann pushed out.
The Lemonade share sale, if successful, would have been one of the most highly valued IPOs by an Israeli-linked firm, Israeli website Calcalist said in June.
The funds raised in the share sale would have helped the New York City-based startup expand its activities to include car insurance and eventually health and life insurance, Calcalist said.
Lemonade, which began its activities with homeowner and renters’ insurance, is a licensed insurer in some US states, including California, Illinois, New Jersey, New York and Texas, allowing users to insure their homes by doing away with agents and replacing them with artificial intelligence and bots, applications that perform an automated task.
According to data compiled by Start-Up Nation Central, which tracks the tech industry in Israel, Lemonade has raised to date $480 million from investors including SoftBank, OurCrowd, Aleph VC, Google Ventures and Sequoia Capital.