Venture Capital or VC words on a periodic table of elements to illustrate money funding and financing for your new startup company or businessSequoia Capital, a California venture firm better known for funding technology or industry game-changers including Apple, Cisco and YouTube, has put its money behind a property/casualty insurance company startup advancing the idea of high-tech peer-to-peer (P2P) insurance.

The U.S. property/casualty insurance industry is about to be tested directly by the sharing economy.

Two tech entrepreneurs have raised $13 million in initial funding to launch a peer-to-peer online P/C insurer named Lemonade, which they promise will reinvent the insurance industry business model and make insurance a “delightful” experience for consumers.

The new company—dubbed Lemonade—attracted $13 million in seed funding from Sequoia and also Aleph, a venture capital firm that partners with Israeli entrepreneurs.

Entrepreneurs Daniel Schreiber and Shai Wininger co-founded Lemonade, and they plan to launch their enterprise in early 2016. Their announcement is vague as far as company specifics, though it highlights the company’s “sharing economy” approach in bullish language more typical for the high tech or biotechnology industries.

Schreiber said Sequoia is putting an “unprecedented amount of money behind a determined attempt to reinvent insurance,” and added that business model details will be forthcoming once the company launches in early 2016. (Wininger said the approach relies on “self-serve technology.”)

“It’s about the insurance industry and the VC industry—and the forces being arrayed by the one to take on the other,” Schreiber added.

Lemonade’s founders tout their idea as both something completely new but also reaching back to the origins of insurance.

It’s not the first company to pursue P2P insurance, however. Germany’s friendsurance, launched in 2010, the United Kingdom’s Guevara, and China’s TongJuBao are among the players, though some behave more as brokers than carriers. A P2P site would typically invite users to form small groups of policyholders who pay premiums into a pool to pay claims. Any leftover money in the pool at the end of the policy period is returned to members.

Robert Hartwig, president of the Insurance Information Institute, said Lemonade’s concept appears “interesting and innovative,” but said its lack of disclosures about details at this point limit an evaluation of the model. Even so, the company will need to meet some minimum requirements, he noted.

“In order to operate, they will be required to demonstrate they have sufficient financial resources (e.g., capital, letter of credit, collateral),” Hartwig said. “It’s likely that reinsurance would be an important part of the company’s structure. It’s hard to say if $13 million is enough to become operational. If it is, it will be on a very small scale. I assume the idea would be to grow organically through marketing and word of mouth.”

Lemonade’s website ( is not functioning yet although it contains a tagline that says, in part, “we’ve redesigned insurance from the ground up to make it honest, instant and delightful.”

In an interview with Carrier Management’s sister publication Insurance Journal, Schreiber explained the company will target consumers, and has hired technologists, designers, actuaries and other industry-recognizable insurance professionals. He added that Lemonade has also hired an “eclectic group of people the insurance industry typically struggles to recruit.”

What’s more, Schreiber said that Lemonade’s executives have been working with New York regulators to become a fully approved and licensed insurance carrier, and not a broker. Unlike Uber, the car-sharing firm, Lemonade will not challenge insurance regulations and will comply with existing laws, he noted.

Where does the name come from?

Schreiber credited it to Wininger, which he said applies to the idea of turning what consumers see as a “lemon” of an experience into “lemonade” and making the insurance buying experience into something positive rather than a necessary evil.

*Material from an Insurance Journal article on Lemonade’s launch was used for this story.