Lemonade, an insurance company powered by artificial intelligence (AI) and behavioral economics, has raised $120m in funding for global expansion.

Japanese giant Softbank led the Series C funding round, which also saw participation from existing investors.

SoftBank Group's David Thevenon will join Lemonade's board. Other investors in the round included Aleph, Allianz, General Catalyst, Google Ventures, Sequoia Capital, Sound Ventures, Thrive Capital, Tusk Ventures, and XL Innovate.

Shai Wininger and Daniel Schreiber founded Lemonade, which uses bots and machine learning technology to process claims faster. 

The company is also licensed as a full-stack property and casualty insurance carrier. 

Lemonade started offering homeowners and renters insurance in New York in late 2016. It is now licensed by 25 states.

Apart from digitizing the entire insurance process, Lemonade decreases costs and bureaucracy by giving. In its first year in market, the company gave back more than 10% of its revenues.

The company launched insurance as an API, and used AI to offer the first insurance policies with Zero Everything: zero deductible, zero rate hikes, zero depreciation.

Lemonade CEO and co-founder Daniel Schreiber said: “The insurance brands we know today came of age in the era of the horse-drawn carriage.

“But insurance is best when powered by AI and behavioral economics, which is why we believe that companies built from scratch, on a digital substrate and with a social mission, will enjoy a structural advantage for decades to come.”

Previously, Lemonade raised $60m in funding from investors including Google Ventures, Sequoia Capital, and Joshua Kushner's Thrive Capital.

Lemonade president and co-founder Shai Wininger said: "SoftBank is an ideal partner for us and we are thrilled to have them on board.

"We share SoftBank's conviction that big data and machine learning are set to profoundly remake our entire industry, and SoftBank has the vision and means to enable this common vision to become a reality."

Image: Lemonade receives $120m funding from Softbank and others. Photo: Courtesy of Lemonade Insurance Agency LLC.