Online insurance company Lemonade has reportedly delayed its initial public offering (IPO) after seeing the problems WeWork suffered after its own.
The InsurTech is holding off its IPO, which could have valued the business at $2bn, after it senses a lack of appetite from investors for tech startups, according to a report from Business Insider which cites people familiar with the matter.
WeWork launched an IPO earlier in the year but after questions were raised of its finances, forcing the company to delay the sale. After this, the CEO was put under fire for his conduct. Eventually, Softbank stepped in to acquire a controlling stake in WeWork, in a deal which valued the business at $8bn – earlier in the year WeWork had been valued at nearly $50bn.
Softbank is also an investor in Lemonade. Softbank led the $300m Series D of Lemonade, which only closed in April 2019.
The round, which was also backed by Allianz, General Catalyst, GV, OurCrowd and Thrive Capital, was raised to support its US and European expansion plans. The company is keen on expanding across Europe, but so far, it is only available in Germany.
Lemonade is available in 26 US states and helps consumers access contents and liability insurance through their smartphones. Its platform charges a flat fee which covers everything, and if after paying claims there is money left over, it is donated to a charity of the policyholder’s choice.
Softbank also led the startup’s $120m Series C round which was closed in late 2017.
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