Lemonade, the insurance startup backed by Japan's SoftBank, soared on its first day of trading Thursday (July 2), rising more than 100 percent as of the afternoon after raising $319 million in an initial public offering.
The company priced the shares at $29 on Wednesday evening, but opened at $50.06 a share on the New York Stock Exchange. Shares later rose as high as $67.44 shortly after 2 p.m. ET. That valued the company at some $3.7 billion.
Lemonade is another in the slew of companies taking advantage of the IPO market's recovery following a COVID-related downturn during March and April.
The company, formed in 2016, works to digitize the insurance process, including replacing brokers and paperwork with algorithms, and the company claims to provide insurance policies to homeowners and renters in a matter of minutes.
Reuters reported that the stock's $29 IPO price was higher than estimated. The indicated price range earlier Wednesday had been between $26 and $28, and the company had earlier only guided the offering to be between $23 and $26.
Last year, Lemonade raised $300 million in a round led by SoftBank. Allianz SE and GV, the venture capital arm for Alphabet, also participated, Reuters wrote. SoftBank owns a 27.3 percent share in Lemonade.
The change toward digital services has benefited Lemonade immensely, PYMNTS reported recently. The company, upon its filing to go public, said the change came from the age demographics of those using its service. According to Lemonade, around 70 percent of its current customers are under age 35 and around 90 percent were not switching from another carrier to join the company's ranks.
Lemonade also said the Federal Reserve's estimate that people under 35 usually had just $11,000 median net worth might not last forever. Data show that those numbers could grow 10 to 15 times as the customers age.
Showing the importance of building relationships, Lemonade said clients tend to move up from renters’ policies to homeowners' or condo policies as time goes on.