(Bloomberg) -- SoftBank Group Corp. is betting that technology can overhaul the home insurance industry by leading a $120 million round in Lemonade Inc.
The New York-based startup, which uses artificial intelligence and bots to minimize paperwork and speed up the claims process for renters and homeowners, had raised $60 million before Tuesday’s announcement. Previous backers included General Catalyst, Alphabet Inc.’s GV and Sequoia Capital. While the firm isn’t disclosing its valuation, people familiar with the matter said it will be more than $500 million, up from the previous round.
Lemonade first launched in September 2016 as a licensed insurance carrier offering homeowners and renters insurance in New York. Over the course of 2017, the firm obtained licenses in 25 states, and created a way for real estate and commerce websites and apps to offer Lemonade’s products, both of which have aided growth and adoption.
“Growth has been in excess of our expectations since our last round,” co-founder and Chief Executive Officer Daniel Schreiber, said in an interview. “We’ll end this year around 90,000 customers, and our target for the year was 13,000,” he added.
While the firm does a lot of marketing, Schreiber said that customer acquisition costs were still lower than expected due to greater word of mouth, though he declined to be more specific.
The new funds will be used to expand into global markets in the new year. Headcount will increase slightly from its current 60 employees.