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The
insurer's foray into California, the most populous U.S. state,
comes amid the company's push to become licensed nationwide,
less than a year after launching in New York. Last month,
Lemonade, which sells policies directly to consumers through its
website and smartphone app, expanded into Illinois.
Lemonade, whose policies become available in California on
Wednesday, is seen by the industry as a "disruptor," or a
company that stands to upend how consumers have traditionally
done business.
The insurer is part of a broader movement among financial and
technology or "fintech" companies that are trying to disrupt
longstanding business models.
Fintech ventures typically leverage technology, such as cloud
data storage or smartphones, to provide cheap and easy-to-access
services such as loans, insurance, payments, money transfers,
stock trading.
In the first quarter this year, venture-backed fintech companies
in the United States raised $1.1 billion, an 8 percent drop from
the previous quarter and down 39 percent from the same period a
year ago, according to venture capital database CB Insights.
"This is huge for us," said Lemonade Chief Executive Officer
Daniel Schreiber. "California is one of the biggest prizes."
The state is the third-largest U.S. market for homeowners
coverage, with insurers collecting $7.46 billion in premiums for
2015, according to the Insurance Information Institute (III).
Florida is the largest homeowners insurance market with $8.77
billion in premiums collected, followed by Texas ($7.99
billion), according to III.
Schreiber declined to comment on the amount of premiums Lemonade
has written to date.
Lemonade has raised a total of $60 million in capital during its
first year, including a new investment from Sound Ventures, the
investment firm of actor Ashton Kutcher and talent manager Guy
Oseary. Last month, Allianz SE said it was also backing the
company but declined to disclose the amount of its stake.
Other backers include Sequoia Capital, GV, General Catalyst and
Aleph.
(Reporting by Suzanne Barlyn in New York; Editing by Matthew
Lewis)
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