SoftBank-backed Lemonade soares 73% in US market debut

Andrew Cummings
July 3, 2020

SoftBank owns a 27.3 percent stake in Lemonade. Lemonade has granted the underwriters a 30-day option to purchase up to an additional 1,650,000 shares of its common stock at the initial public offering price. The insurance company had originally planned on pricing its shares in the range of £18.45 to £20.86 a piece. In light of robust demand, however, it marketed its offering at £20.86 to £22.46 per share. SoftBank maintains an almost 22% stake in the firm, which marketed 11 million shares at $29 just about every on Wednesday following advertising and marketing them at $26 to $28 just about every.

The company was set to list its shares on the New York Stock Exchange under the symbol "LMND" on Thursday. Learn more about the basics of an IPO.

It was valued at $US2.1 billion in its 2019 funding round.

Lemonade is the latest company to capitalise on the sharp recovery in U.S. investor appetite for new stocks following the coronavirus outbreak. The American automotive retailer, Vroom Inc., that went public in June has so far printed an over 100% growth.

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 compared to a net loss of $21.6 million during the same period a year ago. Its sales have more than doubled in that period.

The insurance startup was valued at $2.1 billion previous year after it raised $300 million in a funding round led by Japan's SoftBank, and included insurer Allianz SE, and Alphabet Inc's venture capital arm GV. At the time, the insurer was valued at £1.68 billion. With 11 million shares sold, it raised $319 million in its IPO. The company is also backed by other prominent names like General Catalyst and Sequoia Capital Israel.

Goldman Sachs Group Inc., Morgan Stanley, Allen & Co. and Barclays Plc are leading the offering. Citadel Securities is the designated market maker for the listing.

With market futures showing a strong start today, in part due to a good jobs report, Lemonade may be off to a good start. It takes 90 seconds for Lemonade to offer policies to renters and homeowners and under 3 minutes for payments claim.

Other reports by iNewsToday