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Lemonade Seeks IPO As Public Benefit Corp.

Jun. 11, 2020 6:16 PM ETLemonade, Inc. (LMND)9 Comments


  • Lemonade has filed to raise $100 million in an IPO, although the final amount may differ.
  • The firm operates as an online-only insurance provider for homeowners and renters.
  • LMND has produced growing revenue but at a decelerating rate; net losses are high and mounting, as is operational cash burn.
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Quick Take

Lemonade (NYSE:LMND) has filed to raise $100 million in an IPO of its common stock, according to an S-1 registration statement.

The firm provides a fully digitized insurance information and coverage purchasing service for renters and homeowners insurance categories.

LMND is a public benefit corporation which may impact how management manages the firm's financial activities potentially impacting shareholder profits.

When we learn more about the IPO's pricing and valuation assumptions, I'll provide a final opinion.

Company & Technology

New York, NY-based Lemonade was founded to create an online platform to provide renters and homeowners with insurance information and the ability to bind coverage.

Management is headed by co-founder, Chairman and CEO Daniel Schreiber, who was previously president of Powermat Technologies, a wireless charging company.

Below is a brief overview video of an interview of CEO Schreiber:

Source: CNBC

The company's primary offerings include renters and homeowners insurance coverage. Lemonade has plans to expand into additional insurance categories in the future. The firm's website uses machine learning-enabled chat bots to more quickly assist prospective clients to learn about and purchase the right coverage for their needs. The company is registered as a public benefit corporation and seeks to use the profits from premiums for donation to a charity of the client's choice and, in doing so, reduce excess claims.

Lemonade has received at least $480 million from investors, including SoftBank, Sequoia Capital, Aleph, XL Innovate, and General Catalyst Partners.

Customer/User Acquisition

The company devotes a large amount of marketing via online 'search engines, social media platforms, digital application stores, content-based online advertising' to get users to download its app.

The firm purchases search engine advertising and is active in generating earned social visibility as well.

Sales & Marketing expenses as a percentage of total revenue have been dropping as revenues have

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This article was written by

Donovan Jones profile picture

Donovan Jones is an IPO research specialist with 15 years of experience identifying opportunities for IPOs. He focuses on high-growth technology, consumer, and life science companies.

He leads the investing group IPO Edge which offers: actionable information on growth stocks through first look S-1 filings, previews on upcoming IPOs, an IPO calendar for tracking what’s on the horizon, a database of U.S. IPOs, and a guide to IPO investing to walk you through the entire IPO lifecycle - from filing to listing to quiet period and lockup expiration dates. Learn more.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (9)

WSLegend profile picture
What is their advantage? I use GEICO and can do everything on line or talk to a agent/representative.
What is their “secret sauce”??
I was interested but they are not in my state when I went to check a quote right now. I get my current insurance through progressive, why is this better?
Ted Waller profile picture
Good question. Don't see trying to take business from heavyweights like GEICO and Progressive as a good idea. Flo will crush them. The gecko will eat the remains.
Julie Young profile picture
Who are other public benefit corporations?
Donovan Jones profile picture
Some on this list are no longer PBCs (e.g., Etsy):

12 Jun. 2020
Is there a platform that allows you to buy an IPO STOCK earlier than the day of the IPO?
Forge Global
But will they take a stand. Will it be 50 cents?
919_Investor profile picture
This looks interesting, I think it is worth a small position and see where it goes
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