Growing insuretech startup Clearcover has raised a new mega-round of funding as it works to double its headcount.
The startup announced Tuesday that it raised $200 million in a Series D funding round led by Eldridge, with participation from existing investors American Family Ventures, Cox Enterprises and OMERS Ventures. American Family Ventures is the investment arm of Madison-based insurance company American Family Insurance.
Clearcover has raised $329 million in total funding to date. The startup last raised $50 million in 2020.
Originally founded in 2016, Clearcover has built a platform that uses artificial intelligence to make custom car coverage recommendations to customers at a cheaper rate than its competitors. Clearcover is able to do this because it eliminates overhead costs, like brick-and-mortar offices, expensive ads and outdated technology, said the startup's co-founder and CEO Kyle Nakatsuji.
Clearcover is an end-to-end insurance company, and sells its product to customers through its website and agents.
“We’ve reinvented the way insurance companies work using technology to allow us to deliver customers a better experience, a better product and lower prices all in one,” Nakatsuji said.
Clearcover is now available in 15 states, including Wisconsin, Illinois, California and Texas. Nakatsuji would not disclose exactly how many customers Clearcover has but said it is in the “tens of thousands.”
Business has remained strong throughout the pandemic, Nakatsuji said, adding that its online and cost-effective model helped it stand out amid a crowded insurance market.
“People still needed car insurance people and were shopping online more than they had been before,” Nakatsuji said. “And a lot of people valued low prices as much or more as they ever did."
In 2020, Clearcover doubled its headcount and plans to do the same in 2021. The startup currently employs 250 people, Nakatsuji said.
Besides hiring new employees, the new funding will be used to improve and add new services to its insurance product. Eventually, Clearcover aims to sell other types of insurance besides car insurance, Nakatsuji said.
Clearcover is just one of Chicago's growing insurance startups that's raised funding recently. Aclaimant, a Chicago startup making an insurance platform for employers to report workplace injuries, raised $15 million earlier this month. And Snapsheet, which makes a platform to virtually file insurance claims, raised $30 million in March.
