By Chibuike Oguh
NEW YORK (Reuters) - Automobile insurance startup Root Inc sold shares in its initial public offering (IPO) on Tuesday at $27 apiece, above its target range, to raise $724.4 million, the company said.
Root, which has $200 million in debt, sold 26.8 million shares in its IPO. The company had set an initial target price range of $22-$25 per share for a sale of around 24.6 million shares.
Root's IPO is bigger than those of other technology-powered insurance providers that have gone public this year. In May, insurance comparison website SelectQuote Inc raised $360 million in a listing that valued the firm at $3.25 billion, while SoftBank Group-backed insurance provider Lemonade Inc was valued at $1.6 billion in an IPO that raised $319 million in July.
Founded in 2015, Root began by offering car insurance and now uses a smartphone-administered driving test and an algorithm to offer estimates, according to its website. Tiger Global Management, a $36 billion hedge fund and venture fund manager, is an investor in Root.
In 2019, Root earned $290.2 million in revenue with a net loss of $282.4 million. In the first six months of 2020, the company's revenue was $245.4 million with a net loss of $144.5 million.
Shares in Root are due to begin trading on the Nasdaq on Wednesday under the symbol "ROOT."
Goldman Sachs, Morgan Stanley, Barclays and Wells Fargo Securities are the lead underwriters for the offering.
(Reporting by Chibuike Oguh in New York, additional reporting by Bhargav Acharya in Bengaluru; Editing by Tom Hogue, Lincoln Feast and Krishna Chandra Eluri)