Lemonade's Roomi partnership gets it closer to target audience
Lemonade, the New York-based insurtech startup which seeks to disrupt the traditional insurance model by using behavioral economics, has entered a strategic partnership that increases its reach among its target audience of millennials.
The company has reached an agreement with Roomi, a peer-to-peer marketplace for room rentals, sublets and roommates, to offer its insurance options to Roomi users looking to protect their belongings. Roomi launched in 2015 and boasts more 1.1 million registered users, with its app available in major U.S. and Canadian cities.
After they sign up on the Roomi app, users are offered an option to migrate directly to Lemonade to buy its flat-fee renter’s insurance policies that start at $5 a month. Lemonade promises a quick sign-up and seamless process by using machine learning and chatbots to deliver services, handle claims and reduce paperwork.
“Lemonade's customer base is first time insurance buyers, and the majority of Lemonade's users are under 35 years old, so the fit between both tech companies seemed right on the mark,” says Yael Wissner-Levy, Lemonade’s head of communications and content.
The partnership is a first for Roomi, according to Roomi founder Ajay Yadav. “Lemonade is one of the best companies out there — I’m a user,” he says. “We thought about our user base and renter’s insurance was the first thing that came to our mind, especially with young people who have a lot of tech gadgets and other belongings.”
He added that he likes the fact that Lemonade is AI-driven and is focused on giving back to charity. Lemonade keeps a flat 20% fee of a customer’s premium, while another portion pays claims and purchases reinsurance. The company says it donates money that is not paid out in claims rather than taking the spread between premiums and claims as profit.
“That’s a big one for Roomi, being a company focused around Millennials who want things to be fast, with good service and amazing product,” he says.
Similar partnerships are in the works for Lemonade, says Wissner-Levy, but adds the company is not yet ready to disclose them. She points out that the company iterates daily on the Lemonade product and is constantly rolling out new capabilities. “We're working on a few big updates we'll share later this year,’ she says. “Most exciting is that Lemonade is focused on continuing its rollout nationwide across the US and aims to step foot in an international market in the second half of 2018.”
Lemonade, which officially launched in the fall of 2016 and now covers over 90,000 policyholders, was founded by two veteran tech entrepreneurs — Daniel Schreiber, former President of Powermat, and Shai Wininger, co-founder of Fiverr. Lemonade is currently available in eleven US states, including California, Illinois, New Jersey, New York, and Texas; and is licensed in 17 more states. It currently offers renters insurance, homeowners insurance and insurance for those living in co-ops and condos.
According to Crunchbase, in December 2017 Lemonade received $120 million Series C funding led by Tokyo-based venture capital giant, SoftBank, bringing the company’s post money valuation up to $620 million.