Online insurer Lemonade reportedly seeking New York IPO

Calcalist website says firm founded by Israeli entrepreneurs Shai Wininger and Daniel Schreiber will seek to raise more than $500 million to expand operations

Shoshanna Solomon was The Times of Israel's Startups and Business reporter

Lemonade co-founder Shai Wininger at his office in Tel Aviv on December 20, 2017 (Shoshanna Solomon/Times of Israel)
Lemonade co-founder Shai Wininger at his office in Tel Aviv on December 20, 2017 (Shoshanna Solomon/Times of Israel)

New York-based Lemonade Insurance Company, founded by Israeli entrepreneurs Shai Wininger and Daniel Schreiber, who seek to revolutionize the way homes are insured, are planning to hold an initial public offering of shares on a New York exchange, Calcalist reported without saying where it got the information.

The firm is seeking to raise more than half a billion dollars, at a market valuation of $2 billion, the financial website reported Tuesday.

The share issue, if successful, would make the share sale one of the most highly valued IPOs by an Israeli-linked firm, Calcalist said. Mobileye, founded by Israeli entrepreneurs Amnon Shashua and Ziv Aviram, holds the record today, having sold shares in 2014 on the New York Stock Exchange at a valuation of $5.3 billion, Calcalist said. Mobileye was later acquired in 2017 by Intel Corp. for a whopping $15.3 billion.

Lemonade has been in touch with investment bankers JPMorgan Chase & Co. about the offering, Calcalist said. Shai Wininger did not immediately respond to an email seeking comment.

Lemonade employees working at the firm’s R&D center located in a refurbished, historical templar building in the Sarona area of Tel Aviv; Dec. 20, 2017 (Shoshanna Solomon/The Times of Israel)

The funds will help the company expand its activities to include car insurance and eventually health and life insurance, Calcalist said.

In November, the firm, founded in 2015, said it was planning to expand its services from the US to Europe.

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.

Customers answer a set of simple questions through a chat with the company’s bot, “Maya,” and, in seconds, can get their home insured. It takes 90 seconds to get insured, the company’s website says, and three minutes to get paid, if and when a claim is made.

Unlike traditional insurers, Lemonade takes a flat fee — one that would normally go to the insurance brokers — and sets aside the remaining funds for claims. In a good year, when there’s money left unclaimed, the company does not pocket the money but donates it to causes their customers choose.

The firm has raised $480 million to date from investors including Jerusalem-based OurCrowd; Japan’s Softbank Group; financial services provider Allianz; Google Ventures, the venture capital arm of Alphabet Inc., the parent company of Google; Tusk Ventures; and Israel’s Aleph VC, according to the database of Start-Up Nation Central, which tracks Israel’s high-tech industry.

Before co-founding Lemonad, Wininger co-founded Fiverr, an Israeli startup that has become a global leader for online freelance services. Fiverr filed for an IPO in New York last month, and on June 3 submitted an updated prospectus for the sale of 5,263,158 shares at an estimated initial price between $18 and $20 per share. This gives the firm a post-IPO valuation of $650 million, Calcalist said.

Most Popular
read more: