Ohio-based car insurance startup Root Insurance is looking to raise $350m in a funding round that would propel the company’s valuation to $3.65b, according to the Wall Street Journal.
The Series E round will be led by new investors DST Global and Coatue Management, plus each of Root’s existing investors also plan to participate. As of now, Root has $177.5m in funding, with the latest round of $100m raised in August 2018.
Root uses a person’s smartphone to monitor how well they drive, unlike conventional insurance firms, which take location, age and distance into account.
The company’s smartphone app measures drive behaviors such as braking, speed of turns, and route regularity to determine if a person is a “safe driver” and how much they should pay in premiums.
According to Root, people can save up to 52% on their car insurance policy via.
Their new round would be the largest funding round for a VC-backed insurance startup, with another insurance startup Lemonade coming in second having raised $480m so far.
Like Root, Lemonade uses AI to determine premiums, but only provides homeowners and renters insurance.
According to WSJ, Root made revenues amounting to $133.4m in insurance premiums in the first half of 2019. That’s 12 times the money it earned in the same period in 2018. The firm also had $126.6m in losses in the first half of last year, according to the report.
Root’s main investors include Tiger Global Management, Drive Capital, Ribbit Capita and Redpoint.