Root Insurance: Ohio-Based Company Raises $350 Million Funding At $3.65 Billion Valuation

By Amit Chowdhry ● August 21, 2019
  • 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.

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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.

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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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