Insurance startup Lemonade has raised a $300 million Series D round, according to Fortune. The funding round was led by Softbank, and values the company at a whopping $2 billion.
What they do: Lemonade provides insurance to homeowners and renters online. They use a peer-to-peer system to ease the process of paying out claims.
How it works: Lemonade takes a fixed 20% commission from customers premiums. The other 80% is pooled together for covering damage – 40% for short term payouts on claims made by policyholders and 40% for reinsurance (i.e. insurance for an insurance company).
Trust in humanity: Unlike traditional insurers, the startup doesn’t lose money from paying out claims. To prevent insurance fraud they give the remaining pool of money to charity.