Lemonade Inc., soon to launch the world’s first peer-to-peer (P2P) insurance company, has raised $13 million in seed funding in a round led by Aleph and Sequoia Capital.
Headquartered in New York City, Lemonade was founded by veteran Israeli tech entrepreneurs Daniel Schreiber, former president of Powermat, and Shai Wininger, a co-founder and CTO of Fiverr. Lemonade is set to be the first insurance company designed around peer-to-peer technology. Lemonade harnesses the power of behavioral economics and the essence of the sharing economy, delivering to consumers an insurance experience that is “instantaneous, un-conflicted and downright delightful,’ says the startup.
“It is very unusual for a company to receive $13 million in an initial round of funding,” said Haim Sadger, Partner at Sequoia Capital. “But it is rarer still to find such accomplished founders tackling such a sizable industry with such a compelling solution. We’re betting Lemonade will transform the insurance landscape beyond recognition. It is one to watch.”
“I’ve known Lemonade’s founders for years, and we’re thrilled to be part of their journey from the very start. I can think of no entrepreneurs better equipped to reinvent insurance,” said Michael Eisenberg, Founding Partner at Aleph. “Daniel and Shai are on a mission to deliver a wake up call for the industry, and a refreshing experience to consumers worldwide.”
“Most Americans view insurance as a necessary evil rather than a social good, and that’s something we’d like to change,” said Schreiber, Lemonade’s CEO. “As a fintech-insurance company, Lemonade is designing around the bureaucracy and conflict that haunt the industry, replacing them with technology and transparency. What makes this exciting is that it requires reinventing the very structure and business model of insurance in ways not available to the legacy insurance carriers.”
“We’re challenging the way insurance companies work, with a peer-to-peer business model fueled by self-serve technology,” said Wininger, President and CTO. “We’ve seen this kind of combination breathe new life into other industries, and we’re determined to do the same for insurance.”
It is estimated that P&C (property and casualty) insurance generates $1 trillion of gross margins annually and is dependent on a highly centralized and opaque business architecture – the very kind that is most prone to disruption. Lemonade plans on transforming both the economics and the experience of insurance, injecting radical transparency and delightful experience into domains known for neither.
Sequoia, based in Menlo Park, California, helps daring founders build legendary companies, spurring them to push the boundaries of what’s possible. Sequoia has over 40 years of venture capital experience working with famous entrepreneurs such as Steve Jobs, Larry Ellison, John Morgridge, Jerry Yang, Elon Musk, Larry Page, Jan Koum, Brian Chesky, Drew Houston, Adi Tatarko and Jack Dorsey, among many others. In aggregate, Sequoia-backed companies reportedly account more than 20% of NASDAQ’s total value, according to the company.
Aleph is an Israel-based $150 million venture capital fund focused on partnering with great entrepreneurs to help them scale into large, meaningful companies and globally recognized brands. Started by Eden Shochat and Michael Eisenberg in 2013, the firm has backed companies such as WeWork, Honeybook and Meerkat.