Update: Online Insurer Lemonade Raises $319M During U.S. Stock Market Debut

By | July 2, 2020

Lemonade Inc., the online home insurance provider backed by SoftBank Group Corp., jumped as much as 86% after raising $319 million in its U.S. initial public offering.

Shares of the company opened at $50.06 and rose as high as $53.96 in New York trading Thursday. It sold 11 million shares at $29 apiece on Wednesday after marketing them at $26 to $28 each, statements show.

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Lemonade was trading at $53.36 at 11:45 a.m., giving it a market value of about $2.9 billion, based on its number of outstanding shares.

The debut is the latest market test for unprofitable, venture capital-backed companies as the coronavirus pandemic spurs an investor flight to safety. Shares in automative retailer Vroom Inc. have more than doubled since it went public last month.

Lemonade has been unprofitable since its inception in 2015, it said in its prospectus. It reported a $36.5 million net loss in the three months ended March 31 compared to a net loss of $21.6 million during the same period last year. Its sales have more than doubled in that period.

SoftBank led a $300 million funding round in Lemonade last year, valuing the company at $2.1 billion at the time, Bloomberg News previously reported. SoftBank will own a 21.8% stake in the company upon the IPO, the filing shows. Sequoia Capital Israel and General Catalyst are also among backers.

Goldman Sachs Group Inc., Morgan Stanley, Allen & Co. and Barclays Plc led the offering and Citadel Securities was designated market maker for the listing. Lemonade shares are trading on the New York Stock Exchange under the symbol LMND.

Photo credit: Aaron M. Sprecher/Bloomberg.

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Latest Comments

  • July 3, 2020 at 1:18 pm
    Agency says:
    Low price = worst customers, this model has never worked well.
  • July 2, 2020 at 5:15 pm
    Observor says:
    Right now it looks like they selling their product at a very low price to gain volume even with the hard market in property. It will be interesting if they maintain this strat... read more
  • July 2, 2020 at 2:50 pm
    ab says:
    It doesn't look great. There is not even explosive growth anymore to at least provide a gambler's chance. To get a 10x in market cap now, they need to basically catch up to Pr... read more

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