Startup Lemonade wants to squeeze the insurance industry

09 Dec 2015

More and more popular startups in the finance sector successfully attack the insurance sector.

New York-based startup Lemonade said on Tuesday it had raised $13 million in seed funding from two venture capital funds, Sequoia Capital and Aleph, to create a peer-to-peer insurance offering. Similar to the peer lending model, Lemonade will seek to bring together people in need of insurance and investors with capital to back them.

The deal marks one of many for insurance-focused startups in 2015 after years of quiet. Such startups raised more than $2.4 billion in the first nine months of this year, more than triple the amount raised in all of 2014, according to CB Insights.

Details about Lemonade's business are scarce so far, but the company says it intends to have products on the market early in 2016. Lemonade's insurance policies will be cheaper and easier to use than conventional products, says co-founder Daniel Schreiber.

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