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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.