What's going on?

Lemonade�s eagerly awaited initial public offering (IPO) last week had investors lined up around the block for the insurance fintech�s sweet, refreshing shares.

What does this mean?

Lemonade is one of a handful of new so-called �insurtechs� using artificial intelligence and behavioral economics to determine how much homeowners and renters should pay for insurance � hopefully more efficiently than its incumbent rivals. And it has all the hallmarks of a fast-growing tech business: revenue that was 200% higher last year than the year before, annual losses that eclipsed said revenue, and the all-too-familiar warning that the firm may never become profitable.

But thirsty investors wanted that nectar no matter what. Lemonade initially set its share price between $23 and $26, but such was the demand that it was soon raised to between $26 and $28. And after its shares hit the stock exchange at a still-higher $29, they went on to more than double just a few hours later � meaning Lemonade is already worth over $3 billion. Who said insurance was boring? (Tweet this)

Why should I care?

The bigger picture: The IPO Strikes Back.

Alongside Lemonade, benefits platform Accolade completed its IPO last week, raising $220 million and gaining investors�, sigh, accolades. Then news broke on Friday that Chinese beverage giant Wahaha was weighing up an IPO to raise $1 billion. Throw in the three Japanese companies that went public last month, and it’s starting to seem like IPOs are back with a vengeance�

For you personally: IP-Nope.

A new stock�s first-day performance often determines whether investors see its IPO as a success, especially in the US. But buyer beware: the average day one rise of a new stock in the US is 18%, but according to Bloomberg, most of that benefit falls at the feet of existing investors � SoftBank, in Lemonade�s case � as new backers drive up the stock price. What�s more, 60% of IPO stocks will be trading below their initial price five years down the line.