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Jul 2, 2020

SoftBank-backed Lemonade jumps 86% in US$319M U.S. debut

The SoftBank Corp. logo is displayed alongside notices indicating a change in closing time and for wearing protective masks when visiting a store on a glass door of a store in Tokyo, Japan, on Tuesday, April 14, 2020. SoftBank Group forecast a record 1.35 trillion yen ($12.5 billion) operating loss for the fiscal year ended in March, a sign of how badly Masayoshi Son's bets on technology startups have been battered in recent months. Photographer: Kiyoshi Ota/Bloomberg

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Lemonade Inc., the online home insurance provider backed by SoftBank Group Corp., jumped as much as 86 per cent after raising US$319 million in its U.S. initial public offering.

Shares of the company opened at US$50.06 and rose as high as US$53.96 in New York trading Thursday. It sold 11 million shares at US$29 apiece on Wednesday after marketing them at US$26 to US$28 each, statements show.

Lemonade was trading at US$53.36 at 11:45 a.m., giving it a market value of about US$2.9 billion, based on its number of outstanding shares.

The debut is the latest market test for unprofitable, venture capital-backed companies as the coronavirus pandemic spurs an investor flight to safety. Shares in automative retailer Vroom Inc. have more than doubled since it went public last month.

Lemonade has been unprofitable since its inception in 2015, it said in its prospectus. It reported a US$36.5 million net loss in the three months ended March 31 compared to a net loss of US$21.6 million during the same period last year. Its sales have more than doubled in that period.

SoftBank led a US$300 million funding round in Lemonade last year, valuing the company at US$2.1 billion at the time, Bloomberg News previously reported. SoftBank will own a 21.8 per cent stake in the company upon the IPO, the filing shows. Sequoia Capital Israel and General Catalyst are also among backers.

Goldman Sachs Group Inc., Morgan Stanley, Allen & Co. and Barclays Plc led the offering and Citadel Securities was designated market maker for the listing. Lemonade shares are trading on the New York Stock Exchange under the symbol LMND.

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