Alums of Powermat and Fiverr Get $13M for Stealthy Insurance Startup
Lemonade plans to do something in the insurance scene—the founders, though, are not ready to publicly share what exactly they have cooked up.
Some investors think it is a worthwhile idea, whatever it may be.
On Tuesday, Daniel Schreiber and Shai Wininger, veterans of Powermat and Fiverr, announced they raised a $13 million seed round, led by Sequoia Capital and Aleph, for their somewhat stealthy startup Lemonade, based in New York. Schreiber, the CEO, says his peer-to-peer fintech insurance company wants to do something about what he describes as unhappiness among consumers when it comes to insurance. “There’s something very profoundly broken about the way the insurance sector works today,” he says.
Insurance, Schreiber says, has remained largely unchanged despite the spread of the Internet and other innovations. “Forms that were once filled out on paper may now be filled out online, but the fundamentals have not been revisited since the 1700s,” he says.
How Lemonade plans to disrupt the market, or what technology will be used along the way, remains to be seen, but Schreiber says there is a structural flaw in the relationship between consumers and insurers. “You’re in a zero sum game with them; every dollar they give you is a dollar less to their bottom line,” he says.
This conflict of interest is absolute, Schreiber says, pitting both sides to fight over the same coin. The distrust he claims that has built up for the industry prompted the founding of Lemonade.
In the weeks or months ahead, Schreiber says, more details will come—until then, Lemonade will keep its work out of the spotlight. He did point out, though, that business models and technology that have been effective in fintech and peer-to-peer models in the sharing economy could be used to change the dynamics of the industry. “You can’t fix this by sticking technology on top of existing infrastructure,” he says.