Root’s IPO: A bold vision to reinvent insurance

Redpoint Ventures
Oct 30, 2020 · 3 min read

Our journey with Root

By: Elliot Geidt on behalf of Redpoint

When transportation insurance was first offered in the U.S., it was the 1890s. William McKinley was President. And that first policy — written by Travelers — was actually written for travel by horse and carriage. Fast forward 120+ years, and many of the same insurance providers are still around. While they’ve kept up with newer modes of transportation, not much else has changed in how they price their policies. To these incumbents, they really only care about your demographic profile and — get this — your FICO score.

But when we first met Alex Timm and the Root team in 2017, it was clear they had different plans for auto insurance. Alex and the team recognized that the most recent mobile phones had enough compute power and precision sensors — including a gyroscope, accelerometer, and compass — to paint a remarkably clear picture of an individual’s driving behavior. This approach had the promise of being far more predictive of a driver’s risk than their credit score or age and gender. The idea was fundamentally more fair to drivers. And if done right, it was good business.

Does a driver speed? Do they break hard? Text and drive? Drive on the highway or mostly in the city? It turns out, these are just a few of the hundreds of relevant questions that can be answered by modern mobile phones — which are already in the car with most existing drivers.

Alex and Dan’s vision was bold — and frankly extremely hard to pull off. The data science and actuarial problems are hard. The technology challenges of making this run well on myriad phone models and operating systems are hard. Onboarding customers and managing claims in a mobile-native way that delights customers is hard. The state-by-state regulatory evaluations. Hard. And don’t even get me started on spinning up reinsurance for a new type of insurance ;)

But the Root team figured out.

Like most roads, the journey for Root was winding and challenging. But these are exactly the types of journeys we love to accompany businesses on, and we’ve been honored to partner with the Root team as they’ve helped reshape the way consumers approach their auto insurance.

Back in the 1890s, the world looked much different. And we’d all likely argue the world looks a lot different today than it did even in 2019. But what makes a good company and a good CEO great is the ability to see the road ahead and allow for — and embrace — the curves. Alex’s unique perspective and his genuine belief in better, more affordable policies enabled him to build a company to succeed in all terrains. His relentless focus on detail and making insurance work better have changed insurance — for the better.

To the entire Root team — congratulations!

Elliot and the whole Redpoint team

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Redpoint Ventures

Since 1999, Redpoint Ventures has partnered with visionary…

Redpoint Ventures

Written by

Redpoint partners with visionary founders to create new markets or redefine existing ones at the seed, early and growth stages.

Redpoint Ventures

Since 1999, Redpoint Ventures has partnered with visionary founders to create new markets and redefine existing ones.

Redpoint Ventures

Written by

Redpoint partners with visionary founders to create new markets or redefine existing ones at the seed, early and growth stages.

Redpoint Ventures

Since 1999, Redpoint Ventures has partnered with visionary founders to create new markets and redefine existing ones.

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