Root, a mobile-based auto insurer, announced terms for its IPO on Tuesday.
The Columbus, OH-based company plans to raise $568 million by offering 24.2 million shares (9% insider) at a price range of $22 to $25. The company plans to raise an additional $500 million in a concurrent private placement to Dragoneer Investment Group and Silver Lake. At the midpoint of the proposed range, Root would command a fully diluted market value of $6.1 billion.
Root believes that it can challenge the traditional insurance model by using technology to measure risk based on individual performance. The company utilizes a mobile-first engagement strategy, providing a user-friendly interface for customers' mobile phones.
Root was founded in 2015 and booked $432 million in revenue for the 12 months ended June 30, 2020. It plans to list on the Nasdaq under the symbol ROOT. Goldman Sachs, Morgan Stanley, Barclays, Wells Fargo Securities, Deutsche Bank, Truist Securities, Citi, Credit Suisse, Evercore ISI and UBS Investment Bank are the joint bookrunners on the deal. It is expected to price during the week of October 26, 2020.
