- Ohio-based car insurance startup Root Insurance announced it has raised $350 million in a round of funding at a reported $3.65 billion valuation
Root Insurance, an Ohio-based car insurance startup, announced it has raised $350 million in a round of funding at a $3.65 billion valuation according to The Wall Street Journal. The Series E round of funding was led by new investors Coatue Management and DST Global. And all of Root’s existing investors also plan to participate. Currently, Root has raised $177.5 million in funding.
How does Root work? Root uses a driver’s smartphone to determine how well its users drive unlike other traditional insurance companies — which take age, location, and the distance driven into account.
Root’s smartphone app also measures behavior such as braking, route regularity, and turn speed to determine if someone is considered a safe driver and how much they should pay for insurance. And drivers are able to potentially save more than 50% on their car insurance policy.
In the first half of 2019, Root earned $133.4 million in insurance premiums. This is 12 times the amount the company made in the same period last year. However, the company saw a $126.6 million in losses during the first half of the year.
Root Insurance was founded by CEO Alex Timm and CTO Dan Manges. Prior to launching Root, Manges was the CTO of Braintree and Timm worked as a senior consultant in corporate strategy at Nationwide Insurance.
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