Insurance startup Lemonade announced, this week, a $300 million round of Series D financing initiated by SoftBank Group. General Catalyst, Thrive Capital, GV, Allianz, and OurCrowd are also participating.
If you did not know, the online insurance innovator Lemonade Inc uses an AI-powered bot to digitize—and streamline—the insurance buying experience, specifically for renters and home owners. Any user can simply download the app and answer a few questions to get a customized quote for as little $5 per month. The service price can increase but that is based on several factors like total amount of total personal property owned.
While this is certainly a new way to function in this industry, the company has also differentiated itself by integrating the app with a giveback system tied directly with the product. Basically, Lemonade takes a fixed amount of each monthly payment as a form of revenue. The rest of the monthly payment, then, gets set aside for insurance claims. Finally, unclaimed premiums can go to the user’s charity of choice.
Altogether, the company has grown quite a bit since its initial launch. In fact, Lemonade Inc hit $57 million in revenue, last year. As such, Lemonade Co-founder and CEO Daniel Schreiber says that they are on track to hit $100 million in revenue by the end of this year. He notes to they have already sold 500,000 policies.
With that, then, the round of investing will definitely help Lemonade to expand beyond the United States market. Obviously, this means that Schreiber and co-founder Shai Wininger have their eye on breaking into the European market. And that also means a round of hiring in customer support and claims as well as engineering and data science is also on the way.
Schreiber comments, “Our biggest challenge is managing the growth. How do you create an organization that has to constantly morph? The organization we were two years ago and the one we are now have very little in common. We went from one product in one state to now thinking about multiproduct across continents and five office locations. How do you do that without straining the system and continue to provide good, high quality service?”
With that, the latest round of funding will bring Lemonade’s total financing up to $480 million; and asserts their value at more than $2 billion.