Bulletins
Root’s IPO is riding the insurtech boom
CEO Alex Timm says investors are paying attention.

Insurtech has been having a bit of a moment this year.
Image: Root
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CEO Alex Timm says investors are paying attention.
Insurtech has been having a bit of a moment this year.
Uncertainty might be spiking around the world, but the IPOs just don't stop coming. Today, insurtech company Root went public, after raising $724 million its IPO at a $7 billion fully diluted valuation.
The listing is a remarkable turnaround from earlier this year. "When we entered into the COVID period, we actually pulled back pretty significantly on growth," CEO Alex Timm told Protocol as the company's stock listed on the Nasdaq exchange exchange today. "We didn't know, necessarily, what the world would hold for us." But as things progressed and people started taking to the roads again, Timm said the company saw a "net positive impact … both in terms of profitability and growth," setting the stage for a public market debut.
Insurtech has been having a bit of a moment this year: Lemonade shares doubled on its IPO earlier this summer, while funding for the industry reached $2.5 billion last quarter, up 69% year-on-year. "You're starting to see a lot of investors pay attention to the space," Timm said, attributing the increased interest to the "maturity of the business model." As Root's alternative underwriting model for insuring drivers has been proven out, he said, investors have realized how large the opportunity is. Root, which underwrites car insurance based on driving data picked up from smartphones, offers a fundamentally better product than traditional insurers, Timm argues. The idea is that by surcharging bad drivers, good drivers get a cheaper product — something Timm says other insurers don't offer.
Still, Root's model isn't entirely proven out yet. The company is not yet profitable, and some have raised concerns about its customer retention. But Timm brushed that off, saying that Root's retention rates were inherently lower just because it has a newer customer base, rather than loyal long-timers, and regularly adjusts its prices.
Right now, Timm's goal is to use the IPO proceeds to continue growing the business. "We are laser focused on the U.S. auto opportunity," he said, noting that the IPO provides "ample amounts of capital" to help it execute. Investors seem to believe so: Despite a broader market selloff Wednesday, Root's shares surged soon after opening, trading around 3% above their IPO price.
Shakeel Hashim ( @shakeelhashim) is a growth manager at Protocol, based in London. He was previously an analyst at Finimize covering business and economics, and a digital journalist at News UK. His writing has appeared in The Economist and its book, Uncommon Knowledge.
Welcome to this weekend's Source Code podcast.
David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.
This week on the Source Code podcast: First, an update on Google's user-tracking change. Then, Ben Pimentel joins the show to discuss Square buying Tidal, and what it means for the fintech and music worlds. Later, Emily Birnbaum explains the bill moving through the Arizona legislature that has Google and Apple worried about the future of app stores. And finally, Janko Roettgers discusses Microsoft Mesh, the state of AR and VR headsets, and when we're all going to be doing meetings as holograms.
For more on the topics in this episode:
David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.
An interview with Tom Lantzsch, SVP and GM, Internet of Things Group at Intel
Edge computing had been on the rise in the last 18 months – and accelerated amid the need for new applications to solve challenges created by the Covid-19 pandemic. Tom Lantzsch, Senior Vice President and General Manager of the Internet of Things Group (IoT) at Intel Corp., thinks there are more innovations to come – and wants technology leaders to think equally about data and the algorithms as critical differentiators.
In his role at Intel, Lantzsch leads the worldwide group of solutions architects across IoT market segments, including retail, banking, hospitality, education, industrial, transportation, smart cities and healthcare. And he's seen first-hand how artificial intelligence run at the edge can have a big impact on customers' success.
Protocol sat down with Lantzsch to talk about the challenges faced by companies seeking to move from the cloud to the edge; some of the surprising ways that Intel has found to help customers and the next big breakthrough in this space.
A few years ago, there was a notion that the edge was going to be a simplistic model, where we were going to have everything connected up into the cloud and all the compute was going to happen in the cloud. At Intel, we had a bit of a contrarian view. We thought much of the interesting compute was going to happen closer to where data was created. And we believed, at that time, that camera technology was going to be the driving force – that just the sheer amount of content that was created would be overwhelming to ship to the cloud – so we'd have to do compute at the edge. A few years later – that hypothesis is in action and we're seeing edge compute happen in a big way.
Teaming up with Jay-Z's music streaming service may seem like a move done for flash, but it's ultimately all about the money (and Cash).
Jay-Z performs at the Tidal-X concert at the Barclays Center in Brooklyn in 2017.
Benjamin Pimentel ( @benpimentel) covers fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Signal at (510)731-8429.
Tomio Geron ( @tomiogeron) is a San Francisco-based reporter covering fintech. He was previously a reporter and editor at The Wall Street Journal, covering venture capital and startups. Before that, he worked as a staff writer at Forbes, covering social media and venture capital, and also edited the Midas List of top tech investors. He has also worked at newspapers covering crime, courts, health and other topics. He can be reached at tgeron@protocol.com or tgeron@protonmail.com.
Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.
It was a big week for Jack Dorsey, who started by turning heads in Wall Street, and then went Hollywood with an unexpected music-streaming deal.
Dorsey's payments company, Square, announced Monday that it now has an actual bank, Square Financial Services, which just got a charter approved. On Thursday, Dorsey announced Square was taking a majority stake in Tidal, the music-streaming service backed by Jay-Z, for $297 million.
Benjamin Pimentel ( @benpimentel) covers fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Signal at (510)731-8429.
Digital verification systems could give people the freedom to work and travel. Here's how they could actually happen.
One day, you might not need to carry that physical passport around, either.
Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.
There will come a time, hopefully in the near future, when you'll feel comfortable getting on a plane again. You might even stop at the lounge at the airport, head to the regional office when you land and maybe even see a concert that evening. This seemingly distant reality will depend upon vaccine rollouts continuing on schedule, an open-sourced digital verification system and, amazingly, the blockchain.
Several countries around the world have begun to prepare for what comes after vaccinations. Swaths of the population will be vaccinated before others, but that hasn't stopped industries decimated by the pandemic from pioneering ways to get some people back to work and play. One of the most promising efforts is the idea of a "vaccine passport," which would allow individuals to show proof that they've been vaccinated against COVID-19 in a way that could be verified by businesses to allow them to travel, work or relax in public without a great fear of spreading the virus.
Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.
He's a striking presence on the beach. If he navigates Plaid's data challenges, Eric Sager will loom large in the financial world as well.
Plaid COO Eric Sager is an avid surfer.
Benjamin Pimentel ( @benpimentel) covers fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Signal at (510)731-8429.
Eric Sager is an avid surfer. It's a fitting passion for the No. 2 executive at Plaid, a startup that's riding fintech's rough waters — including a rogue wave on the horizon that could cause a wipeout.
As Plaid's chief operating officer, Sager has been helping the startup navigate that choppiness, from an abandoned merger with Visa to a harsh critique by the CEO of a top Wall Street bank.
Benjamin Pimentel ( @benpimentel) covers fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Signal at (510)731-8429.