Root, the parent company of Root Insurance, has filed paperwork with the SEC to go public, following in the footsteps of other large insurtechs Hippo and Lemonade which went public earlier this year.

Why should we care?
Root is betting on investor enthusiasm around digitally-delivered insurance models. The Columbus, Ohio-based company began offering auto insurance in 2015. It uses the concept of telematics to determine driver premiums, administering a driving test via smartphone and offering quotes based on algorithmic patterns. In 2019, the company moved into renters insurance. The company’s revenue grew 85% to $290.2M in 2019, but its net losses in 2019 were $282.4 million, up from a $69 million net loss in 2018. The company faces competition from other insurtechs like Go and MetroMile, as well as large legacy providers. The company acknowledged its history of losses as a risk factor in its SEC filing, but claims it can win through a clear value proposition and data-driven tech strategies.