TRAILBLAZER
Its vision was to tackle the archaic car insurance industry , taking a market that worked for insurers and flipping it round so that it worked for customers too . Root Insurance became the nation ’ s first licensed insurance carrier powered entirely by mobile , and it drew heavily on data and technology to bring fairness back into policy pricing . Its entire business model is predicated on usage-based insurance – the idea that customers only pay for the miles they clock up – and this is one of the ways that Timm achieved such a fair pricing model . But it also did something that many incumbent insurers would never have dared to do : it committed to removing credit scores from its car insurance pricing .
Despite a well-defined vision , the path to success was not always clear for Timm and for his fledgling insurtech company . Speaking to Forbes magazine in 2019 , he described the startup experience : “ Building Root was like a treasure map . When you start a journey , you may have a good idea of where you want to go ; you ’ ve got a rough direction . But not everything is on the map . No map is perfect , and along the way you can find hidden gems , you can also run into storms . The success of your journey is based on how quickly and how nimbly you can react to all those things that you find along the way . That ’ s really what we found as a company .”
1,500 number of employees
US $ 827.5mn value of capital raised
34 number of US states in which it ’ s active
Nine-digit investment propels the company to rapid growth In the beginning , nobody signed up for the Root app . “ Crickets ,” TImm would later recall , remembering how slow the initial uptake was . But , instead of panicking , the Root team patiently built out their user base , proving a couple of Root ’ s fundamental concepts while utilising the opportunity to test and learn with its earliest customers . Eventually , Alex Timm knew that they would need to find funding .
“ In the beginning , it ’ s rough ,” he told Forbes magazine . “ You don ’ t have anybody with you . You know the bank account is going to run dry in a matter of months , not a matter of years .”
After raising US $ 5mn in Series A in October 2016 , Root Insurance secured another US $ 21.5mn led by Ribbit Capital in Series B funding the
“ Building Root was like a treasure map . No map is perfect and , along the way , you can run into storms ”
18 January 2023