New York-based Lemonade, an insurance start-up powered by artificial intelligence and behavioural economics, has closed a $34 million funding round, bringing its total funding to $60 million.
The funding was headed by General Catalyst and was participated in by GV (formerly Google Ventures), Thrive Capital, and Tusk Ventures, as well as existing investors Aleph, Sequoia, and XL Innovate. It comes less than three months after the start-up, which offers homeowners and renters insurance, was officially launched, and less than a year after it raised a substantial $13 million in seed funding.
Lemonade was licensed to operate in New York on September 15 this year, subsequently filing for a license in California, with the company outlining plans to expand broadly in 2017.
“We believe in replacing brokers and paperwork with bots and machine learning, and we now have the backing to unleash this formula across new products and geographies,” Daniel Schreiber, co-founder and CEO at Lemonade, said in a statement.
The platform uses bots to deliver insurance through its app and at lemonade.com. It also uses AI to allow consumers to file claims through chat, and authorised bots to pay claims instantly.
Tom Hulme, GV general partner, said: “We look for companies that have the potential to radically improve customer experience, and we saw that clearly in Lemonade. They are harnessing a compelling mix of behavioural economics, artificial intelligence, and great design.
“Lemonade’s full-stack approach gives it flexibility to keep iterating on that customer experience, and to expand fast in 2017.”
The company has also earned a B-Corp certification for its “Giveback” program, which donates unclaimed money to charity.
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