Softbank is doubling down on Lemonade. Lemonade, a New York-based peer-to-peer insurance company powered by artificial intelligence, raised $300 million in Series D funding at a valuation of more than $2 billion. Softbank led the round, and was joined by investors including Allianz, General Catalyst, GV, OurCrowd, and Thrive Capital. The company plans to use the capital to launch new products and accelerate its US and European expansion in 2019.
Here’s how Fortune described the startup in 2016: It pools insurance premiums from people who know and trust one another. That pot of money is used to pay members’ claims, and members then keep any unused cash. Its competitive advantage for users is that the insurance company doesn’t gain anything from denying claims, and is therefore more willing to reach settlements. Larger reinsurers provide backup in case damages exceed available funds.
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