Auto insurance startup Root Insurance has announced that it has raised $100 million in a recent Series D funding round.
The funding round was led by Tiger Global Management, while Redpoint Ventures, Ribbit Capital and Scale Venture Partners served as follow-on investors. TechCrunch reported that Root Insurance’s valuation jumped to $1 billion after the funding round.
Founded in 2015, Ohio-based Root has plans to use the funds to expand into existing markets and open business in new states. The startup is also looking to hire more employees – particularly engineers, actuaries, claims, and customer service personnel – to support its growth.
At present, Root Insurance operates in 20 states, and has been given the greenlight to operate in another eight. The company hopes to go nationwide by the end of 2019.
“Our growth the past six months has exceeded even our own expectations,” Root co-founder and CEO Alex Timm told VentureBeat. “We went from writing just shy of $4 million of direct premium in all of 2017, to nearly $23 million in the first half of 2018.”
Root Insurance utilizes AI algorithms to adjust risk and occasionally provide discounts to consumers. It aims to incorporate “individual driver behavior” into quotes, instead of relying on standard demographic data such as the age of the driver or the number of accidents a driver has been in.
Customers interested in signing up for Root must download a proprietary app, which gathers data while the customer drives over a 2-3 weeks period. When a driver has been confirmed as having good driving habits by the app, Root will offer an insurance quote.