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Insurance Tech Startup Lemonade Raises $300 Million in Funding: Term Sheet for Thursday, April 11

Polina Marinova

  • MAKING LEMONADE

    Softbank is doubling down on Lemonade.

    Lemonade, a New York-based peer-to-peer insurance company powered by artificial intelligence, raised $300 million in Series D funding at a valuation of more than $2 billion. Softbank led the round, and was joined by investors including Allianz, General Catalyst, GV, OurCrowd, and Thrive Capital. The company plans to use the capital to launch new products and accelerate its US and European expansion in 2019.

    Here’s how Fortune described the startup in 2016: It pools insurance premiums from people who know and trust one another. That pot of money is used to pay members’ claims, and members then keep any unused cash. Its competitive advantage for users is that the insurance company doesn’t gain anything from denying claims, and is therefore more willing to reach settlements. Larger reinsurers provide backup in case damages exceed available funds.

    Gee, you may think, but this startup is barely three years old! It’s already raised a total of $480 million and is valued at $2 billion?! Yes. And it already has 163 employees and has sold over half a million policies. It also reportedly hit $57 million in revenue last year and is on track to do $100 million this year. “In less than three years, Lemonade has expanded across the US, given back to dozens of charities chosen by our community, and fundamentally changed how a new generation of consumers interacts with insurance,” said Daniel Schreiber, CEO and cofounder, Lemonade.

    When I wrote about Lemonade’s last funding round in Dec. 2017, I noted that Softbank is fundamentally reshaping the tech financing. At the time, Softbank led the company’s $120 million Series C round, and I called it “a bombshell amount.” (ha!) But I had enough common sense to ask the question: “As much as we blast companies for raising more than they need, sub-optimally spending their resources, and ruining their cultures in the meantime, are we even at the peak yet?”

    And on April 11, 2019, the answer is, “Absolutely not.” As long as players like Softbank are willing to double down and propel the growth of companies they have identified as category leaders, there will be no shortage of capital in the near future.

    NEW FUNDS: Slow Ventures, a venture capital firm based in San Francisco & Boston, raised $220 million across two new funds. It raised $165 million for its fourth seed fund, Slow IV, and $55 million for its debut Slow Opportunity fund.

    “With our first Opportunity Fund, we’re excited to be able to invest additional capital in existing Slow portfolio companies as they scale, while also now being able to invest alongside notable leading Series B firms in more mature growth-stage companies that we missed earlier on,” the Slow Ventures team wrote in a Medium post this morning.

    The firm’s partners are Kevin Colleran, Sam Lessin, and Will Quist. They will continue to focus on leading seed-stage investments. Its existing portfolio companies include Casper, Slack, Ro (Roman), Allbirds, Postmates, Airtable, Pinterest, OpenDoor, Citizen, Robinhood, and Everlane.

    Also of note, Slow co-founder Dave Morin and Scott Marlette, who has been at the firm since 2016, will be stepping back from making new investments from the new funds but will continue to support the existing Slow portfolio companies.

  • VENTURE DEALS

    Bitglass, a Campbell, Calif.-based data protection company, raised $70 million in Series D funding. Investors include Quadrille Capital, Future Fund, New Enterprise Associates, Norwest and Singtel Innov8.

    HistoSonics, a developer of a non-invasive robotics platform and beam therapy, raised $54 million in Series C funding. Varian Medical Systems led the round, and was joined by investors including Johnson & Johnson Innovation – JJDC, Inc, Lumira Ventures, Venture Investors, and the State of Wisconsin Investment Board.

    Mavenlink, a provider of cloud-based software for the modern services organization, raised $48 million in Series E funding. Investors include Carrick Capital Partners and Goldman Sachs Growth Equity.

    Embroker, a digital insurance company, raised $28 million in Series B funding. Tola Capital led the round, and was joined by investors including Canaan Partners, Bee Partners, Manulife Capital Ventures, and Nyca Partners and XL Innovate.

    Affectiva, a Boston-based developer of an emotion-sensing artificial intelligence software solution, raised $26 million in funding. Investors include Aptiv PLC, Trend Forward Capital, Motley Fool Ventures and CAC.

    CleverTap, a customer lifecycle management platform, raised $26 million in Series B funding. Sequoia India led the round, and was joined by investors including Tiger Global Management and Accel.

    BentoBox, a New York-based startup that helps restaurant owners build mobile-friendly websites, raised $16.4 million in Series B funding. Threshold Ventures (formerly DFJ Venture) led the round, and was joined by investors including Bullpen Capital, Haystack and Female Founders Fund.

    Shedul.com, a London-based booking platform for salons and spas, raised $20 million in Series B funding at a valuation of $105 million. Partech led the round, and was joined by investors including Target Global, BECO Capital, and FJ Labs.

    Rasa, an open source company that enables developers to build contextual AI assistants, raised $13 million in Series A funding. Accel led the round, and was joined by investors including Basis Set Ventures.

    Diameter Health, a Farmington, Conn.-based provider of clinical data integration solutions, raised $9.6 million in Series A-1 funding. Optum Ventures led the round, and was joined by investors including Activate Venture Partners, Connecticut Innovations, Excelerate Health Ventures and LRV Health.

    Radar, a New York-based location context platform, raised an $8 million series A round led by Two Sigma Ventures. Accel, Heavybit, Scott Belsky (Behance Founder and Adobe Chief Product Officer), and Ashley Smith (previously GitHub VP of Marketing) also participated in the round.

    Horizen Labs, Inc, a blockchain development company that enables businesses to deploy proprietary blockchain solutions, raised $4 million in seed funding. Investors include Digital Currency Group, and Liberty City Ventures.

    FenestraPro, a Dublin-based provider of software applications for the design of more energy efficient building façades, raised €1.2 million ($1.4 million) in seed funding. Investors include Pi Labs, Enterprise Ireland, and Applied Software.

    TrackVia, a Denver-based low-code application platform, raised funding of an undisclosed amount. The investor was Primus Capital.

  • HEALTH AND LIFE SCIENCES DEALS

    Cullgen Inc, a San Diego-based biotechnology company, raised $16 million in Series A funding. Investors include Sequoia Capital China and Highlight Capital.

    EdiGene, a Japan-based biotechnology company focused on treating genetic disorders, raised $15 million in Series B funding. Investors include UTokyo Innovation Platform, SBI Investment, Fast Track Initiative, SMBC Venture Capital, Mizuho Capital and CareNet Group.

  • PRIVATE EQUITY DEALS

    Eurazeo agreed to acquire a 25% minority stake in MCH Private Equity, a Spain-based middle-market private equity fund manager. Financial terms weren’t disclosed.

    Audax Private Equity made an investment in Astute Inc, a Columbus, Ohio-based provider of AI-driven customer engagement, digital self-service, and first-party consumer data management software. Financial terms weren’t disclosed.

    EverWatch, a portfolio company of Enlightenment Capital, acquired Northwood Global Solutions, a provider of technology solutions specializing in cloud architecture and migration, cybersecurity, analytics and big data systems architecture to the intelligence community. Financial terms weren’t disclosed.

    RLJ Equity Partners LLC acquired a majority stake in Virteva LLC, a Minneapolis-based provider of managed services for digital companies. Financial terms weren’t disclosed.

    Lyons Magnus, a portfolio company of Paine Schwartz Partners, acquired TRU Aseptics, a Beloit, Wisc.-based maker of aseptic products. Financial terms weren’t disclosed.

    Horizon Capital acquired a minority stake in Dobrobut, a Ukraine-based healthcare services-based provider. Financial terms weren’t disclosed.

  • OTHER DEALS

    GuestReady acquired BnbLord, a Paris-based property management startup. Financial terms weren’t disclosed.

  • IPOs

    PagerDuty, a San Francisco-based operations and analytics platform maker, raised $218 million in an IPO of 9.1 million shares (6% insider) priced at $24, above its previous range. Andreessen Horowitz, Bessemer, and Accel back the firm. Morgan Stanley, J.P. Morgan, RBC Capital Markets, and Allen & Company are underwriters. It plans to list on the NYSE as “PD.”  Read more.

    Tufin Software Technologies, an Israel-based enterprise software manager for network security policies, raised $108 million in an IPO of 7.7 million shares priced at $14. The firm posted revenue of $85 million in 2018 and loss of $4.4 million in 2018. Catalyst Private Equity Partners (26.4%) backs the firm. J.P. Morgan, Barclays, and Jefferies are underwriters. It plans to list on the NYSE as “TUFN.” Read more.

  • FIRMS + FUNDS

    Bregal Partners, a New York-based investment firm, raised $650 million for its second fund, Bregal Partners II LP.

    Shasta Ventures, a Menlo Park, Calif.-based venture capital firm, raised $325 million for its sixth fund, according to an SEC filing.

  • PEOPLE

    Vjerana Spajic re-joined AlpInvest Partners as a vice president.

    Macquarie Capital named Timothy Alden as a managing director.

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    Polina Marinova produces Term Sheet, and Lucinda Shen compiles the IPO news. Send deal announcements to Polina here and IPO news to Lucinda here.