The share price of digital insurance company Lemonade (NYSE: LMND) ended its second day trading on Wall Street up a further 17% at $81.19, giving a market cap of $4.46 billion. Having risen 140% on its first day of trading, at one point yesterday, the digital insurer’s share price was up 30%, meaning it had tripled its value since last week’s NYSE IPO.
Lemonade quenches thirst of banks and hedge funds
The enormous skepticism about Lemonade’s much awaited IPO now seems to have been swept aside by a dizzying debut on Wall Street.
Lemonade’s revenue is growing fast, but it is still low, and the company is far from turning a profit or presenting a positive cash flow. But it is now seems that investors see Lemonade as a worthwhile risk.
Last Wednesday Lemonade successfully raised $319 million at $29 per share at a valuation of $1.6 billion, after money.
Prominent investors in Lemonade after the IPO include Softbank (22%), Sequoia and Aleph (8.3% each), the company’s founders Daniel Schreiber (6.4%) and Shai Wininger (7.2%), General Catalyst (5.9%) and XL Innovate (4.2%).
Digital insurance company Lemonade was founded in Israel in 2015. The company sells home insurance online based on big data and artificial intelligence. The company began operating in the US and has a license to sell insurance in most US states. Lemonade also began operating in Europe last year. Lemonade has claimed in the past that it can gather 100 times more data that traditional insurance companies, which makes it cheaper and more efficient than its traditional rivals and gives it the ability to offer more precise pricing.
Published by Globes, Israel business news – en.globes.co.il – on July 7, 2020
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