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$LMND today is like $META at its post-IPO bottom
Investing in companies after they go public is difficult. You don't know if it will keep going higher or lower. Everyone has different views on different companies but these views can change overtime. When $UBER first went public, people were complaining how the business was burning cash, food delivery wouldn't become a common way people got food and Uber was burning money in the food delivery space, taxis were cheaper than ride share, and the gig economy will be destroyed with government regulation.

With the pandemic, investors were glad Uber was big in food delivery as their ride share business essentially went to $0. While the Uber Eats division was bleeding huge losses and showing diseconomies of scale in the beginning, overtime, the losses narrowed and eventually, the Eats business made a profit as the economy started reopening. Even thought the economy reopened, Uber Eats continues to fulfill more deliveries than it did during the pandemic. Also during the pandemic, Uber sold their air taxi business to $JOBY, sold their autonomous vehicle division to $AUR, and did everything it could to save money.

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Luckily for Uber IPO investors, as long as they held onto their stock throughout the ups and downs from 2019 onward, they would be sitting on nearly 90% gains. Imagine what Facebook, Tesla, and other amazing companies, who went public around the early days of the tech boom, went through as they were working to prove that their business models worked. What we saw with Uber, Facebook, and others is what I think is currently happening with Lemonade. This tweet by one of the Lemonade community members was what brought this perspective to me. To summarize their thoughts, after one strong quarter, investors are able to see an inflection point in the business and optimism for that business starts going again. When analyzing the Q4 earnings results of Lemonade, not only did they achieve record revenue but their gross loss ratio dipped to 77%. With synthetic agents, Lemonade is able to see improvements in their ability to generate cash flow.

One quarter may serve as an inflection point, but there's a bigger picture at play with Lemonade that is hard to ignore. From another community member that is also a fan of Lemonade, he wrote a tweet that compares Lemonade to big insurance companies like GEICO (owned by $BRK.A) and Progressive. While you can read his tweet on how Progressive and GEICO become very successful, this is what he noted for Lemonade:

-Niche Market: Started in 2015, targeting young, digital native first-time insurance buyers; initially focused on renters and pet insurance, followed by cross-selling and upselling of other products when customer aging.
-Distribution: No agent. Simplifies the process with chatbot for quick, hassle-free quotes and onboarding through app or web.
-Customer Service: AI + real person offers around-the-clock service; Instant claim payment under 3 sec with AI. Live Policy for customer to make changes to coverage
-Technology: Uses generative AI and automated systems, enabling rapid scaling with low incremental cost, with 40% of claims paid automatically without human intervention. 50 + machine learning models are connected as a single brain for decision making. e.g., AI Maya, AI Jim, Cooper, etc.
-Product Range: Offers auto, rental, homeowners, pet, and life insurance.
-Branding: Pink color. Unique name and slogan: forget everything you know about insurance. Charity giveback.

This list of characteristics helps people understand why this insurtech is a great business in the making. With gross loss ratios continuing to trend lower, and management projecting aggressive EPS growth for 2024, there are more reasons to be optimistic on the business. The future of Lemonade looks exciting and I look to follow the story as it goes.
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