Mobile-based auto insurer Root increases deal size by 2% ahead of $578 million IPO

Root, which provides auto insurance using mobile-based telematics technology, raised the proposed deal size for its upcoming IPO on Monday.

The Columbus, OH-based company now plans to raise $578 million by offering 24.6 million shares (11% insider) at a price range of $22 to $25. The company had previously filed to offer 24.2 million shares (9% insider) at a range of $22 to $25. The additional 0.4 million shares come as a result of added insider selling. At the midpoint of the revised range, the offering will be 2% larger than previously anticipated.

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 more than doubled its revenue in the 1H20, generating $307 million in direct written premiums and posting a gross loss of -$8.4 million.

Root was founded in 2015 and booked $432 million in sales 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.

The article Mobile-based auto insurer Root increases deal size by 2% ahead of $578 million IPO originally appeared on IPO investment manager Renaissance Capital's web site renaissancecapital.com.

Investment Disclosure: The information and opinions expressed herein were prepared by Renaissance Capital's research analysts and do not constitute an offer to buy or sell any security. Renaissance Capital's Renaissance IPO ETF (symbol: IPO), Renaissance International ETF (symbol: IPOS), or separately managed institutional accounts may have investments in securities of companies mentioned.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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