In a statement seen by Reuters ahead of the announcement, Chicago-based Clearcover did not comment on its valuation, but a person familiar with the deal said the latest round would make it a so-called “unicorn” - implying a valuation of $1 billion or more.
The Series D funding round also includes investments from existing investors, including American Family Ventures, Cox Enterprises and OMERS Ventures, as well as several new investors, Clearcover will announce in the statement.
The COVID-19 pandemic has reduced the importance of physical networks of agents in insurance and helped “insurtech” providers like Clearcover, which uses artificial intelligence and big data to reduce costs and better target customers.
Global investment in the sector jumped 12% to $7.1 billion for 2020, a record high, according to Willis Towers Watson.
“We like many other insurers saw COVID-19 as a light tailwind. We’re a digital auto insurer, people still had to buy car insurance. They were shopping online more than ever,” Chief Executive Officer Kyle Nakatsuji told Reuters ahead of the announcement.
“There’s (also) this ongoing and broader transformation in the industry which the pandemic has accelerated,” he added.
Founded in 2016, Clearcover has focused on auto insurance, although Nakatsuji said they were planning to expand into new areas. He declined to provide details but said the company was studying a number of possible avenues.
The company will use the funds to increase its headcount and invest in new products. Clearcover also plans to expand to close to 25 U.S. states by the end of the year from the current 15 states.