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A brand new unicorn is born: Root Insurance coverage raises $100 million for a $1 billion valuation

Root Insurance coverage, an Ohio-based automotive insurance coverage startup with a tech twist, stated Wednesday it has raised $ 100 million in a Co...

 

Root Insurance coverage, an Ohio-based automotive insurance coverage startup with a tech twist, stated Wednesday it has raised $ 100 million in a Collection D funding spherical led by Tiger International Administration, pushing the corporate’s valuation to $ 1 billion. 

Redpoint Ventures, Ribbit Capital and Scale Enterprise Companions all participated as follow-on traders on this newest spherical.

The automotive insurance coverage firm, based in 2015, plans to make use of the funds to broaden into present markets and make inroads into new states, in addition to rent extra staff corresponding to engineers, actuaries, claims and customer support to assist elevated scale. 

Root supplies automotive insurance coverage to drivers. Not precisely a brand new idea. But it surely establishes the premium prospects primarily based on their driving together with different elements. Drivers obtain the app and take a take a look at drive that usually lasts two or three weeks. Then Root supplies a quote that rewards good driving habits and permits prospects to change their insurance coverage coverage. Prospects can buy and handle their coverage by means of the cell phone Root app.

Root says its strategy permits good drivers to avoid wasting greater than 50 p.c on their insurance policies in comparison with conventional insurance coverage carriers.

The corporate makes use of AI algorithms to regulate danger and generally present reductions. For instance, a automobile with a complicated driver help system that it deems improves security may obtain additional reductions.

“Root Insurance coverage is main digital innovation in U.S. auto insurance coverage,” Lee Fixel, a accomplice at Tiger International Administration stated in an announcement. “This business is ripe for change, and we’re excited to put money into a staff that has the experience, imaginative and prescient, and momentum to ship actual outcomes. We sit up for rising our partnership with Root and serving to them broaden their footprint throughout the US.”

The corporate has grown from its house market of Ohio into 20 different states previously two years. The corporate plans to broaden to all 50 states and Washington, D.C., by the top of 2019.

Drive Capital and Silicon Valley Financial institution are additionally traders within the firm.

Exclusive: Verizon eyes roughly $100 billion bid for Verizon Wireless stake

 

Exclusive: Verizon eyes roughly 0 billion bid for Verizon Wireless stake

Verizon Communications Inc. has hired advisers to prepare for a possible total of 100 billion dollars cash and stock to offer complete control over Verizon Wireless joint take venture partner Vodafone Group Plc two people familiar with the situation said on Wednesday .

Verizon, which already owns 55 percent of Verizon Wireless, has a proposal for Vodafone not yet filed, but the two banks and legal advisors hired for a possible bid, the sources said.

Verizon hopes to reach an amicable agreement on talks with Vodafone but is willing to take as the British company is not involved in the negotiations, one of the sources. Public auction

There is no guarantee that Vodafone will be in a contract or offer is realized according to the same sources. Interested

In the last decade, Verizon has little secret of his desire to his British partner of the joint venture, which is made to buy the No. 1 U.S. mobile operator. The sources said that Verizon is ready to aggressively push an agreement.

Verizon, taking advantage of the historically low interest rates and the strong share price, is convinced that the company could raise about $ 50 billion in bank financing, the sources rate. Use He plans to pay for the rest of the contract with its own shares, they added. The sources requested anonymity because the talks are confidential.

is expected to be held before the annual meeting of shareholders, one of the sources. Governance of Verizon

to discuss the details of a possible buyout Verizon Wireless next week at a meeting scheduled

Verizon spokesman Bob Varettoni declined to comment, but the statement said the U.S. telephone earlier this month, which he said it would be a buyer of their company Verizon Wireless Vodafone.

Verizon Wireless and Vodafone were not immediately available for comment Wednesday.

The challenge Verizon Wireless is about two-thirds of the market capitalization of Vodafone in the intended use. The company also offers Vodafone exposure to the U.S. market in full swing. But Vodafone has studied what to do with his involvement as CEO Vittorio Colao streamlines a company built on the foundations of the aggressive expansion.

Analysts said the sale of its stake in Verizon Wireless, Vodafone will be distributed to the shareholders, the purchase of fixed assets in Europe and to make the company an attractive takeover target for other telecom giants like AT & possible money back , T Inc.

For Verizon Communications, which is based on the activities of Verizon Wireless for growth, ownership give him much more flexibility because of the cash generated by the mobile business.

New Street analyst Jonathan Chaplin said he expects to ask Vodafone more but $ 100 billion was a good starting point.

“This is a good time for both parties to seriously consider a transaction. Vodafone is likely to ever get a better multiple than now,” said Chaplin. “Growth (Verizon Wireless) is likely to slow down over time, especially as Sprint and T-Mobile USA and AT & T better. “

Verizon came close to a deal in 2004 when Vodafone tried to buy AT & T Wireless, Cingular but lost sales at auction. This Agreement may Vodafone would bring its brand across the Atlantic and should be 45 percent to sell in Verizon Wireless.

If an agreement were to happen now, it would come at a time where the telecommunications industry has recently experienced a new round of consolidation efforts. MetroPCS Communications Inc. shareholders voted to approve a merger with Wednesday No.4 U.S. wireless provider T-Mobile USA, a subsidiary of Deutsche Telekom AG.

The merger came after 2011 effort Deutsche Telekom to sell to AT & T T-Mobile for $ 39 billion has been blocked by the U.S. antitrust supervisors. Verizon would likely encounter similar obstacles redemption of Verizon Wireless.

Meanwhile, Dish Network Corp., the supplier of the U.S. satellite No.2, last week offered to buy wireless carrier Sprint Nextel Corp. for $ 25 billion in cash and 5 shares, challenge a proposed between Sprint and Japan’s Softbank Corp.

BUILDING TAX transaction

One of the major obstacles to an agreement was up here hoping that Vodafone a tax bill of $ 20 billion to make if its interest, which means that Verizon would have to pay to sell it for the British company to make the effort a high price.

But according to the sources of a transaction is structured to achieve a final tax assessment likely $ 5000000000 or less.

According to the plan, Verizon would the U.S. holding company to acquire Verizon Vodafone importance of the British band wireless and certain other assets in countries like Germany and Spain have the sources said. This structure would order from Verizon enjoying a provision of the tax in the Netherlands called substantial relief for shareholders, they said.

exempted under certain conditions for capital gains realized on the sale of shares in companies in which the seller owns at least 10 percent of the stock and the amount of stock owned for at least a year, according to Robert Willens, an expert from New York accounting and tax and a professor at Columbia Business School.

Verizon Chief Financial Officer Fran Shammo said last week that he was convinced that they could buy without significant tax implications. Vodafone game He did not say how it would work.

“The proposed tax of $ 5000000000 legislation is in line with our estimate of the taxes they have to pay for individual international issues of Vodafone subsidiary which owns Verizon Wireless, “said Chaplin.

DEAL FINANCING

Verizon shares have risen has easily surpassed his young colleagues this year about 20 percent so far its wireless business in terms of profitability and growth of the customer, and the face of rising hope that it will buy the rest. Verizon Wireless

investors say that the conditions for an agreement have improved after the successful acquisitions Verizon’s stock prices and the low interest rates.

Any agreement that such an important part of the stock includes, however, mean dilution for the shareholders of Verizon Communications.

If the contract is for $ 100 billion, Chaplin said it would increase Verizon Communications in 2014 to finance. earnings per share by 25 percent, even after diluting the stock Verizon payments and interest on the part of the agreement by debt

“It would be the largest investment ever to be in debt but we think it could be done, “said Chaplin.

The sources said that Verizon has not launched a formal fundraising effort, but barriers to raise money for a deal.

So far no money this year, Vodafone shares rose about 23 percent after trailing in the last months of 2012. Recent acquisitions have been attributed by analysts to sell hopes participation in Verizon.