Failed 2024
Root Insurance
Telematics-based car insurance IPO'd at $6.7B then lost 97% of value. Insurance is harder to disrupt than VCs thought.
Founded → Closed
2015 → 2024
Funding Raised
$527M
Industry
InsurTech
Country
USA
IdeaProof AI Failure Score
65/100
Market Fit Risk
45
Burn Rate Risk
80
Founder Risk
30
Full Analysis
Root Insurance used smartphone telematics to assess driving behavior and price auto insurance. IPO'd at $6.7B valuation in 2020. But the company's loss ratio exceeded 100% — it paid more in claims than it collected in premiums. The stock crashed 97% from its IPO peak. Root represents the broader insurtech lesson: insurance is a regulated, data-intensive business where startups struggle to compete with incumbents.
Could This Failure Have Been Prevented?
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