Lemonade Increases Target Price of IPO, Shares Scheduled to Trade on NYSE July 2nd

Lemonade, a fast-growing Insurtech firm, has upped its initial public offering (IPO) share price range according to an updated S-1 filing. Shares are expected to trade on the New York Stock Exchange (NYSE) on Thursday under the ticker symbol “LMND.”

It was last reported that Lemonade was pricing the offer at between $23 and $26 a share. Today’s filing indicates a share range of between $26 to $28 a share – a significant increase that must be indicative of investor demand.

If the shares list at the upper number, Lemonade will raise $354.2 million upon the issuance of 12.65 million shares.

Lemonade is a new spin on insurance that seeks to align interests with those of its customers. Its mission is predicated on the fact that most people hate their insurance providers due to poor service, denied claims, and spurious coverage. To quote Lemonade:

“At the foundation of our business model is a direct, digital, customer-centric experience that delivers rapid growth and strong retention. Our customer centricity runs deep, and our underlying business model is designed to align interests between us and our customers. This technology-first customer acquisition and retention strategy, combined with our unconflicted business model, results in a highly attractive financial model …”

Currently, Lemonade provides home-owner / renters insurance in both the United States and parts of Europe. Lemonade is licensed to provide insurance in 41 states in the US, with live operations in 28 (including DC), and Germany and the Netherlands. Lemonade holds a pan-European license and thus is able to sell insurance in 31 different European countries.

Net proceeds of the IPO (about $271.5 million) will be used to for general corporate purposes, including working capital, operating expenses, and capital expenditures. Additionally, Lemonade states they may use a portion of the net proceeds to acquire or invest in businesses, products, services, or technologies – but the company adds it does not currently have any investment targets.

Like most early-stage firms, Lemonade is not generating any net income as it focuses on market growth. The company reported a net losses of $52.9 million and $108.5 million in the years ended December 31, 2018, and December 31 2019, respectively, and a net loss of $36.5 million for the three months ended March 31, 2020.

Of note, global investment crowdfunding platform OurCrowd is an early backer of the firm and thus its investors may benefit from the IPO – depending on how shares trade.

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