Softbank has become the latest big name investor to take a stake in New York-based insurance start-up Lemonade.
The Japanese company has taken part in a $120m funding round for Lemonade. It joins Allianz, Sequoia Capital and Google Ventures, which had already backed the company.
Lemonade, which sells insurance to people who rent property in the US, is one of the most high profile of the wave of so-called insurtech start-ups aiming to disrupt the centuries-old insurance industry.
The company recruited behavioural economist Dan Ariely to give it insights into customer behaviour, and says that it has paid out on claims as little as three seconds after they were made. It also has a novel business model, taking a flat fee for its services and giving a portion of unused premiums to charity each year.
Unlike many other start-ups, Lemonade has been going through the laborious process of securing its own insurance licences. It now has licences in 25 US states and has sold 80,000 policies since launching a year ago.
The company says it will use the new money raised for global expansion in 2018.
“By combining big data and AI with a seamless user experience, Lemonade is truly revolutionizing the insurance industry,” said David Thevenon, a senior investment professional at SoftBank. “We have been impressed by the team’s creative approach to disrupting the traditional insurance model.”
Lemonade is not SoftBank’s first foray into insurtech. Earlier this year it was a cornerstone investor in ZhongAn’s $10bn IPO in Hong Kong.