Root Insurance, an Ohio-based auto insurance startup with a side of mobile data tech, has raised $100m in a Series D funding round that gives them a brand spanking new $1B valuation.
With the funding, the company plans to burn some rubber, expanding into all 50 states and hiring more employees.
Root’s workforce has grown from about 60 employees since March with plans, according to CEO Alex Timm, to create more than 400 full-time jobs by 2021.
How is it different than Metromile?
Root and pay-per-mile car insurance startup Metromile are often considered competitors, but in fact, the two are polar opposites in terms of insur-tech world.
While Metromile caters to millennials in big cities who aren’t driving as often, the Midwestern company’s model saves money for regular commuters who put normal-to-heavy mileage on their shaggin’ wagons.
The company establishes premium customers based on a 2-3 week app-based driving test, which gives lower quotes based on good driving behavior.
Sounds a little invasive, but people may like the price
The company also uses AI algorithms to adjust risk and potentially provide more discounts on top of good driving.
According to TechCrunch, Root says its philosophy enables good drivers to cut what they pay with traditional insurance carriers by more than 50%.