Lemonade, the insurance start-up hailing out of New York, is preparing to launch an initial public offering. 

In a Securities and Exchange Commission filing late Monday, the fintech said it's seeking to raise around $100 million and plans to list on the New York Stock Exchange under the ticker “LMND.”

In the prospectus, the startup said that since it launched at the end of 2016, gross written premium or GWP increased to $116 million in 2019 from $9 million in 2017. For the three months ended March 31, 2020, GWP was $38 million. The company insured 425,000 homes in 2018 up from 100,000 at the close of 2017. 

Revenue at the fintech jumped from $2 million in 2017 to $67 million in 2019. Its net losses have widened during the same time frame going from $28 million in 2017  to $109 million in 2019. For the first quarter of 2020 revenue was $26 million and net losses stood at $37 million.  The company, which hasn’t achieved profitability, expects more losses as it invests to grow the enterprise.

 

Lemonade is among the crop of fintechs trying to disrupt traditional financial services. The company leverages technology, data, and AI to cut down on the cost of insurance and to make it easier to obtain. A quick chat with Lemonade AI bot Maya is all that’s required to secure renters or homeowners' insurance. The fintech caters to millennials who are accustomed to managing all of their finances on a smartphone. Its also a certified B-Corp which enables it to donate unclaimed premiums on an annual basis.

Lemonade said in the prospectus about 70% of its customer base is under the age of 35 while 90% said they weren’t switching from another carrier. Lemonade pointed to the fact that 90% of its customers are new to insurance as a driver of future growth. “Given our subscription-based model, we believe that the lifetime value of our customers is significantly higher than our cost of acquiring them, and our ability to acquire them earlier, at a stage that incumbents struggle to, should pay dividends for decades to come,” the company wrote in the prospectus.  Lemonade noted that customers who purchased renter's insurance from the company three years ago spend 56% more today. 

While there is a lot to like about Lemonade's prospects, the startup is not without risks. In order for it to continue to grow it has to acquire more customers, expand coverage with its existing customer base, and launch new products, all of which takes money. Not to mention its tapping the public markets without a clear timeline for when it will be profitable.

Since its inception, the company has raised $480 million in funding, according to CrunchBase. Last April it raised $300 million in a Series D round of funding led by SoftBank, the Japanese tech company, and included participation by Allianz, General Catalyst, GV, OurCrowd , and Thrive Capital. That round gave it a valuation of more than $2 billion. The company said at the time it was using the funding to speed up expansion in the U.S. and Europe and get into new product lines. That was the last capital raise for Lemonade.