Shares of Israeli-founded Digital Insurer Lemonade Soar After IPO

Lemonade shares jump 111% in first day of trading on the New York Stock Exchange

TheMarker
Reuters
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The Lemonade app.
The Lemonade app.Credit: Ofer Vaknin
TheMarker
Reuters

The shares of Lemonade, the New York-based digital insurance start-up founded by Israelis Daniel Schreiber and Shai Wininger, soared on Thursday, a day after it exceeded expectations in its $319 million U.S. initial public offering.

Lemonade priced 11 million shares at $29 each, the company said in a statement. That was higher than a price range indicated earlier on Wednesday, which had been raised to between $26 and $28 per share versus previous guidance of between $23 and $26.

The IPO valued Lemonade at $1.6 billion, which was less than the $2.1 billion it was valued at last year, after it raised $300 million in a funding round led by Japan’s SoftBank.

Founders of Lemonade Daniel Schreiber (right) and Shai Wininger (left).

However, in their first day of trading on the New York Stock Exchange, Lemonade shares jumped 111% at about midday local time in New York to $61.27. That gave it a market capitalization of more than $3.3 billion.

Lemonade, started in late 2016, has digitized the entire insurance process, replacing brokers and paperwork with algorithms. It says it provides insurance policies to homeowners and renters in as little as 90 seconds and claims payments in three minutes. Besides SoftBank, which has a 27.3% stake in Lemonade, backers include insurer Allianz and Alphabet’s venture capital arm GV. Lemonade has pursued breakneck revenue growth at the expense of widening losses.

Lemonade is the latest company to capitalize on the sharp recovery in U.S. investor appetite for new stocks following the coronavirus outbreak. On Tuesday, U.S. business analytics firm Dun & Bradstreet Holdings raised $1.7 billion in its IPO after it sold more stock than expected and at a price above its indicated range.

Goldman Sachs, Morgan Stanley, Allen & Company and Barclays are the managing bookrunners for the offering.

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