Lemonade (LMND) launched its IPO on Thursday, in a deal set to raise $270 million next week by offering shares at a range of $23 to $26. Baillie Gifford plans to take down $100 million of the IPO (37%). At the $24.50 midpoint, the New York insurer would be valued at about $1.4 billion, a steep discount to its last round.
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Lemonade has raised about $480 million privately. In September it closed a $300 million Series D led by SoftBank at $42.21 that valued it at about $2.0 billion. Its proposed IPO price of $24.50 represents a 42% discount to the latest round on a per-share basis. Series C investors fare better. General Catalyst and SoftBank invested $120 million in early 2018 at $13.80 per share; at the IPO price that round stands to realize a 78% gain.
An IPO down-round is often a black eye for a company, an indication that growth or profits failed to materialize, or that public markets don’t share the same enthusiasm for a VC’s investment thesis. That said, it’s hard to fault a company for accepting SoftBank’s cash infusion, which occurred just prior to SoftBank-backed WeWork (WE) imploding.
A Lemonade IPO at $24.50 wouldn’t be the year’s biggest down-round...
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