Root raises $724 million in IPO

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(Bloomberg) -- Auto insurance platform Root Inc. and its shareholders raised $724 million in its U.S. initial public offering, with shares priced above a marketed range.

The Columbus, Ohio-based company sold 24.2 million shares, together with investors selling 2.6 million shares of their own, at $27 each, according to a statement. In addition to the IPO proceeds, funds managed by Dragoneer Investment Group and Silver Lake have each agreed to buy $250 million in common shares in a private placement, the statement showed. The company had marketed the shares for $22 to $25 each, according to a filing with the U.S. Securities and Exchange Commission.

Online insurance platforms have fared well despite the economic downturn brought on by the coronavirus pandemic. Shares of the home insurance platform Lemonade Inc. have risen more than 70% from its July IPO price.

The offering is being led by Goldman Sachs Group Inc., Morgan Stanley, Barclays Plc and Wells Fargo & Co. The shares are expected to begin trading Wednesday on the Nasdaq under the symbol ROOT.

Light trails from traffic illuminate the Warringah Freeway and the Bradfield Freeway during the morning commute in Sydney, Australia, on Monday, May 25, 2020. Australia has a three-stage plan to reopen the economy by the end of July, after lockdown restrictions smashed businesses, particularly in the hospitality and services industry. The nation’s eight state and territory governments are moving at their own pace, depending on the number of Covid-19 infections in their jurisdictions. Photographer: Brendon Thorne/Bloomberg
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