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This capital infusion comes just months after the Columbus-based company announced its $52 million Series C. Root’s previous investors, Redpoint Ventures, Scale Venture Partners, and Ribbit Capital, also participated in the round. Root has raised $177.5 million since its founding in 2015, and the company is now valued at $1 billion, post-money.
As Crunchbase News previously reported, Root Insurance uses a mobile first, data-driven approach to providing auto insurance policies. The company’s quoting process relies in large part on driving data, which is gathered through applicants’ smartphones during a test-driving period. While the company factors image, credit score, and other demographic data, the mobile-enabled driving assessment is given the most weight during the quoting process.
Root Insurance has expanded its operational reach from 12 U.S. states to 20 since its last fundraise March. It reports a more than 4,500 percent “year-over-year increase in direct written premiums in the first six months of 2018,” per its press release.
“We went from writing just shy of $4 million dollars of direct premium in all of 2017 to nearly $23 million in the first half of 2018,” Co-Founder and CEO Alex Timm told Crunchbase News in an email.
With its fresh capital, the company plans to hire more talent and continue rapid expansion, expecting to be present in all 50 states and Washington D.C. by the end of 2019. When we last spoke, Timm told Crunchbase News that Root Insurance would shift its model, providing a different product in regional markets like California, which has more stringent regulations regarding driver data protection. Timm says the company is “still working through the specifics” of how its approach will change in those regions, but he says Root is currently “working closely with regulators” to make the product available to all U.S. drivers.
More companies like Root Insurance are attempting to take the intermediary out of often opaque and outdated business processes, ranging from recruiting to insurance procurement. With more accessible, mobile-first approaches, startups like Root are aiming to capitalize on the maturing millennial population and their generational successors.
Illustration Credit: Lianne Dias