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Lemonade

Neo Insurance
Pet Care Tech
Segments:
Automobile, Homeowners & Renters, Life, Miscellaneous
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Product stage:
Growth
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Lemonade is a full-stack insurer that provides a range of insurance products that include renters, homeowners, life, car, and pet insurance. The company operates completely digitally, using AI-powered chatbots to onboard clients and process claims. The company’s AI runs several anti-fraud algorithms to eliminate false claims and asserts to handle 30% of claims instantly. The company’s business model is similar to peer-to-peer insurance, where Lemonade donates any unclaimed premiums to charitable causes of the customer’s choosing. Lemonade offers life insurance through its website and mobile apps in partnership with digital life insurance provider, Bestow. 

The company most recently launched its own car insurance product, “Lemonade Car” in November 2021, which uses its underlying AI-based technology to process policies and claims, enabling safe drivers to obtain better rates. Lemonade Car has been specifically designed to offer lower insurance rates for low-mileage drivers and environmentally friendly electric vehicles (EVs) and hybrid cars. The offering will use a telematics app to measure factors such as mileage and driving habits and will also provide services such as 24/7 on-location roadside assistance. 

Lemonade utilizes a machine learning model–6th generation Lifetime Value (LTV6)–to predict a customer's likelihood to churn, claim, and cross sell, from which it derives an estimated lifetime value of a customer. It is also used to score each product, market and campaign. In addition, by incorporating customer acquisition cost into the model, it helps the company decide which product, market, and campaign receives the incremental dollar spend.

In July 2022, Lemonade completed the acquisition of Metromile, a pay-per-mile automobile insurance provider, in an all-share transaction valued at USD 145 million or 7.3 million Lemonade shares, excluding cash, worth USD 150 million, which marked Lemonade’s first acquisition. Through the acquisition, Lemonade aimed to bolster its auto insurance offerings by using Metromile’s vast amount of driving data to offer competitive and precise policies and benefit from Metromile’s written premiums of over USD 110 million and insurance licenses in 49 states, compared to the three it owns in Ohio, Illinois, and Tennessee, accelerating its speed to the market throughout the US.

The company holds a pan-European license, which enables it to sell insurance in 31 countries across Europe with established operations in France, Germany, and the Netherlands. In addition, it obtained a UK carrier license from the Prudential Regulation Authority (PRA) in June 2023 , allowing the company to introduce a broader range of insurance offerings as well as strengthen its presence in the country. It initially launched in the UK in October 2022 , offering renters (contents) insurance.

Key customers and partnerships

As of June 2023, Lemonade had ~1.9 million customers (up 20.7% YoY). 

Lemonade partnered with Mitchell International , to use the latter’s claims management platform to streamline and automate the claims processes of its auto insurance business–Lemonade Car. In addition, the company entered into a strategic partnership with Aviva to enter the UK market offering renters insurance, with the latter also being its reinsurance partner. It also collaborated with BNP Paribas Cardif (the personal lines insurance arm of BNP Paribas) to offer digital renters insurance in France. Furthermore, the company partnered with Chewy to offer pet insurance policies as part of the latter’s suite of insurance and wellness offerings CarePlus. 

In June 2023, the company partnered with General Catalyst (GC), a venture firm and an early investor in Lemonade, to create Synthetic Agents. This program, which commenced on July 1, 2023, involved General Catalyst (through its Customer Value platform) financing up to 80% of all Lemonade's customer acquisition costs. In return, they received a commission of up to 16% of the stream of premiums they helped finance. Once GC had recovered its investment and capped the return on any one cohort, the remaining 'lifetime value' of the customers from that cohort accrued entirely and indefinitely to Lemonade.

Funding and financials

In July 2020, Lemonade sold 11 million shares in an Initial Public Offering (IPO), raising USD 319 million in the process at a valuation of USD 1.6 billion. Lemonade announced a secondary stock offering in January 2021, where the company offered 3 million shares for sale, with the option to purchase additional shares for underwriters to cover higher-than-expected demand. Lemonade also disclosed that certain existing shareholders would also be offering their own shares for sale, amounting to approximately 1.5 million shares.

For the full year of 2022, Lemonade recorded total revenue of USD 256.7 million (up 99.9% YoY), due to gross earned premium increasing 68.0% YoY to USD 490.5 million. However, its net loss deteriorated 23.4% YoY to USD 297.8 million, and its net loss ratio fell 4 pp YoY to 97% in FY 2022.

Neo Insurance

Neo Insurance

Key stats
Featured companies
180
Total funding (USD)
13.5 Bn
Total addressable market (USD)
143.4 Bn
Key competitors
 
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Company profile
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Recent Updates

Geographic expansion
Partnerships
Apr 9, 2024
Lemonade launches homeowners insurance in France in partnership with BNP Paribas Cardif
Neo Insurance
Geographic expansion
Jan 10, 2024
Lemonade car insurance now available in Washington
Neo Insurance
Management news
Dec 20, 2023
Lemonade reinstates co-CEOs to former positions
Neo Insurance
Product updates
Nov 29, 2023
Coalition of InsurTechs join to launch ‘InsurTech Coalition’ to shape future of insurance
Neo Insurance
Geographic expansion
Nov 14, 2023
Lemonade car insurance now available in Arizona
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Earnings/results
Aug 2, 2023
Lemonade reports Q2 2023 results; bottomline marred by catastrophic weather events
Neo Insurance

Company Brief


HQ location:
5 Crosby St. 3rd floor New York NY USA
Founded year:
2015
Employees:
1,001-5,000
Total Funding:
USD 631.5 million
Last Funding
USD 150.0 million, Jul 2023

Funding


Investors


No investor data is available

Funding data are powered by Crunchbase
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