Lemonade (LMND), an online provider of home and renters insurance, plans to raise $297 million with an initial public offering receiving heightened attention from investors. The Lemonade IPO will price Wednesday evening and trade Thursday.
XThe New York-based company late Tuesday raised the IPO to a price range of $26 to $28 per share. That's up from $23 to $26. Lemonade plans to offer 11 million shares.
In the Lemonade IPO filing, the company says it's "rebuilding insurance from the ground up on a digital substrate and an innovative business model." It uses artificial intelligence to sell insurance, largely to a younger crowd. About 70% of its customers are under age 35.
"We believe this IPO is on track for a very strong debut," IPO Boutique, a research and advisory firm, said in a note to clients.
Strong Interest In Lemonade IPO
The Lemonade IPO came in "many multiple-times oversubscribed, it said, meaning investor demand ran much higher than supply. It also said underwriters foresee pricing at the high end or above the price range.
An artificially intelligent bot named AI Maya greets customers when accessing the website on mobile devices.
"A two minute chat with our bot, AI Maya, is all it takes to get covered with renters or homeowners insurance, and we expect to offer a similar experience for other insurance products over time," the company says.
Policy holders file claims by chatting to another bot, AI Jim.
$480 Million In Venture Capital Raised
The company says it raised about $480 million in venture capital investments. In addition, about $300 million of that came from Japan's SoftBank, which will own about 21.8% of shares.
"By leveraging technology, data, artificial intelligence, contemporary design, and behavioral economics, we believe we are making insurance more delightful, more affordable, more precise, and more socially impactful," Lemonade said in the IPO filing.
In 2019, Lemonade reported revenue of $67.3 million, up 200% from the prior year. However, it showed a net loss of $108.5 million, vs. $53 million. First-quarter revenue jumped 138% to $26.2 million, with a net loss of $36.5 million.
The Lemonade IPO will trade on the New York Stock Exchange under the ticker LMND. In addition, the lead underwriters are Goldman Sachs and Morgan Stanley.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
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