NEW YORK — SoftBank Group has led a $120 million Series C funding round in Lemonade Inc., not the drink, but a NY-based insurance company utilizing artificial intelligence and behavioral economics. Lemonade plans to use the funds to accelerate its global expansion in 2018.
SoftBank joins prior investors Aleph, Allianz, General Catalyst, GV (Google Ventures), Sequoia Capital, Sound Ventures, Thrive Capital, Tusk Ventures, and XL Innovate. The SoftBank Group’s David Thevenon will join Lemonade’s board.
SoftBank is also a big investor in WeWork, the office-sharing company. It invested $4.4 billion in WeWork in August.
Founded by tech veterans Shai Wininger and Daniel Schreiber, Lemonade is a technology company that is also licensed as a full-stack property and casualty insurance carrier. The company began offering homeowners and renters insurance in New York in late 2016, and is now licensed by 25 states, home to two-thirds of the US population.
“The insurance brands we know today came of age in the era of the horse-drawn carriage,” said Daniel Schreiber, CEO & Co-Founder, Lemonade. “But insurance is best when powered by AI and behavioral economics, which is why we believe that companies built from scratch, on a digital substrate and with a social mission, will enjoy a structural advantage for decades to come.”
In addition to digitizing the entire insurance process, Lemonade reduces costs and bureaucracy through giving. In a reversal of the traditional insurance model, Lemonade takes a flat fee and donates a portion of unclaimed premium dollars to nonprofits during its annual ‘Giveback’. In its first year in market, Lemonade gave back over 10% of its revenues, set a world record when it paid a claim in 3 seconds, launched insurance as an API, and used AI to offer the first insurance policies with ‘Zero Everything’: zero deductible, zero rate hikes, zero depreciation.
“SoftBank is an ideal partner for us and we are thrilled to have them on board,” said Shai Wininger, President & Co-Founder, Lemonade. “We share SoftBank’s conviction that big data and machine learning are set to profoundly remake our entire industry, and SoftBank has the vision and means to enable this common vision to become a reality.”
“By combining big data and AI with a seamless user experience, Lemonade is truly revolutionizing the insurance industry,” said David Thevenon, a senior investment professional within the SoftBank Group. “We have been impressed by the team’s creative approach to disrupting the traditional insurance model with innovations like Zero Everything policies and Giveback, and we look forward to supporting the company’s rapid growth.”