A startup that wants to transform insurance ‘beyond recognition’ has added $33 million to its war chest


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Two months after launching out of stealth to take on the peer-to-peer insurance industry, New York-based Lemonade has raised $33 million in funding, according to an SEC filing from December 2nd.

First spotted by CB Insights‘ filing tracker, the quiet raise that closed in November is the opposite of the company’s splashy debut last year.

In December 2015, the insurance startup raised $13 million in seed funding — the largest ever seed investment by legendary Silicon Valley firm Sequoia capital.

Lemonade then stayed quiet in for months.

A press release in August announced that the company had received a “significant investment” from XL Innovate and added Tom Hutton from the firm to its board. The SEC filing could be the official notice of the August raise from XL Innovate and last December’s seed funding round. In the filing, Tom Hutton is listed as board member of the company, alongside Sequoia’s Haim Sadger and Alpeh VC’s Michael Eisenberg.

Lemonade did not respond with a comment when reached by Business Insider.

The company re-emerged in September with its first product: peer-to-peer homeowner’s and renter’s insurance in New York. Lemonade sells rental insurance policies for as little as $5 a month, and home insurance for as low as $35 a month (your policy rates may vary). Its business is conducted entirely online via an app. There are no human insurance brokers, and no plans to ever use them.

But where most insurance companies pocket the money you pay as profits, less any claims paid, Lemonade takes a straight 20% cut of the policy rate as its share. And if your group pays more collectively than it uses as claims for the year, Lemonade donates the money to a charity of your choice (from your kid’s school to an established charity).

“We don’t make money denying claims. If money is left over, we don’t want to be tempted and we don’t want you to be tempted either. Consumers do embellish claims,” its CEO Daniel Schreiber told Business Insider’s Julie Bort in October.


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