Dive Brief:

• Online insurance start-up Lemonade, the "Insurtech" backed by SoftBank Group, went public Thursday on the New York Stock Exchange and immediately became 2020’s best IPO debut. Shares grew 139% in its first day of trading.

• Lemonade sold 11 million shares at $29 each, above its already increased $26 to $28 price range, which topped an earlier range of $23 to $26 per share, MarketWatch reported.

• "We're excited to add a bunch of new, amazing investors who seem pleased about our future prospects," CFO Tim Bixby told Barron's. "Our stock values are about the future, not the past."

Dive Insight:

Bixby, a veteran CFO with extensive digital experience, has been at the helm of Lemonade's finances for three years and has served on the advisory board of Sightworthy, an on-demand video marketing company, since 2016. Prior to joining Lemonade, Bixby served four years as CFO of Shutterstock, a digital content licensing marketplace, and from 1999 to 2011, he served as CFO and board member of LivePerson, a cloud mobile and online business messaging solutions provider.

Lemonade opted to launch its IPO because the accountability that comes with being a public company is a catalyst for growth, Bixby said, telling Barron's that Lemonade's leadership believes a public platform to be "the right way to build a large insurance company."

Lemonade has a $4.5 billion market cap after two days of trading. Bixby says this leaves room in the insurance market for a large, established, digital company. "We think we have the pole position," he said. "But it's a huge market. There’s no 'winner takes all' in insurance."

Lemonade plans to use its IPO proceeds to acquire more customers, launch more products, eventually introduce a pet insurance offering, and expand across the country. Lemonade is currently licensed to conduct business in 41 states, but only operates in 28, according to its SEC filing. It also has a pan-European license, which allows it to sell in 31 European countries, Barron’s reported.

For four years, Lemonade has provided stolen or damaged property and personal liability coverage for U.S. homeowners and renters. Lemonade claims its average customer can buy a policy in three minutes. It also uses artificial intelligence (AI) to pay out claims within seconds, Bixby told Barron's. About 70% of Lemonade's customers are under 35.

"We do everything," Bixby said. "That enables us to handle the whole customer experience just like Allstate, State Farm or Chubb. We can do it completely differently because we built our systems entirely from scratch."

Put together, property, casualty and life insurance premiums total $5 trillion globally, and account for 11% of U.S. GDP, Lemonade said in its regulatory filing last month. According to Bixby, "investors really welcome that story of a completely new approach to an old industry. That's huge."

"Lemonade seeks to rewrite the rules on the insurance industry through a David versus Goliath dynamic," CEO Daniel Schreiber and COO Shai Wininger said in the filing.

"As transformative as the prior revolutions were for insurance, there is reason to believe that today's will be even more so. No part of the value chain is immune this time: distribution models, business models, statistical tools, systems of management, cost structures, corporate structures, corporate culture, technology stacks, user experience, marketing channels, data sources, data uses, value propositions, human capital — all these and more are being upended," Wininger said.

The New York-based company's mission is to "harness technology and social impact to be the world's most loved insurance company," MarketWatch reported.

As far as purchasing a competitor, Bixby told Barron's Lemonade has high standards. "[That company] has to be even better than what we’ve built, and we haven’t seen that yet," he said.