An exciting milestone: Announcing our $10M Series A

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We are excited to announce that Roots Automation has secured $10M in Series A funding. MissionOG leads the round, with Liberty Mutual Strategic Ventures (LMSV) participating and Vestigo Ventures and CRV making follow-on investments. We are also pleased to share that Scott Stephenson, the former Chairman & CEO of Verisk Analytics, is a new investor.

We are delighted to welcome MissionOG’s Managing Partner George Krautzel to the board of directors.

This fresh round of capital comes at a critical time.

Hot-off-the-back of a global pandemic and straight into a turbulent economic environment, our customers have turned to Digital Coworkers to overcome increasing margin pressure and operational challenges.

The ongoing commitment from our customers and our investors is a testament to the Digital Coworker’s ability to deliver real business value and live our mission: to make work more human.

Read the official press release here

How it all started

Four years ago, John Cottongim and I grabbed a coffee at a Starbucks near New York’s City Hall and discussed why companies invested heavily in automation but consistently failed to realize its promise.

The reason for their investment: as evidenced then and still experienced today, acquiring talent is hard. The Insurance industry, for example, has maintained a 10% vacancy rate and its year-over-year cost to onboard talent is 20% higher than planned.

On automating process, our time at AIG and Mars - and conversations with peers across Industry - taught us three important things: (1) the total cost of ownership for most automation efforts was up to 40 times higher than planned; (2) companies needed a variety of financial, operational and technological skills to make an automation work; and (3) to make automation perform as richly as humans requires a compilation of technologies. Specifically:

1. A recent study found that 69% of respondents experience broken bots at least once per week. 41% said it takes over five hours to fix a broken bot. However, some respondents noted it takes 24 hours or more to fix a broken bot¹.
2. Further, a Forrester study found that 50% of the total benefit created by RPA is subsequently spent on managing the RPA operation². Additionally,, an Everest Group study found that the FTE cost for people with techno- functional roles (e.g. F&A+RPA) jumped 15%+ from 2021 to 2022³.
3. Finally, according to Everest Group, in 2018, the split between standalone RPA vs RPA+AI related projects was 80% vs 20% (respectively). In 2021 the same split was 36% vs 64% (respectively)⁴ – highlighting the need for additional tools to go beyond basic automation.

See our latest whitepaper looking beyond RPA for a deeper dive into ^1,2,3,4 data points, and more

This collection of challenges led us to build our AI-first, industry-aware, coachable Digital Coworkers. The forming thesis: a truly turn-key automation product that interacts with, learns from, and shares knowledge amongst industry experts (i.e., our customers’ employees) can overcome the skill, technology, and financial hurdles that have historically muted automation performance.

We’ve been proven right!

Our early success – thanks to your trust in us and our team’s dedication to customer outcomes above all else - is underpinned by short time-to-value and predictable ROI for buyers like Sedgwick and Cincinnati Financial. Notably, the experts, the line-level employees at our customers who ultimately shape their brands and reputations, trust their Digital Coworker counterparts will consistently follow through on any work they task them with completing.

We continue to expand our relationships with customers, including companies like Berkshire Hathaway, Favor, and American Exchange. Our organic growth is championed by both the customer’s C-suite and by line-level management. As a founder and CEO, the trust line-level personnel have placed in our Digital Coworkers is the most rewarding metric since this group has historically distrusted automation in principle.

Throughout 2022, our value proposition has expanded to include more than just headcount savings. We now focus on reducing premium and claims leakage (i.e., how much revenue customers lose due to defects in their processes). Minor improvements there translate to many millions in retained revenue for customers.

Building on this foundation, we believe the market potential (TAM) for our Digital Coworkers represents $100bn+, with at least $67bn of margin improvements available within Claims Management alone.

Looking toward 2023

The Series A funding will enable Roots to:

1. Increase our impact on Insurance claims handling

We’ve more than tripled the usage of Roxanne, our Claims Assistant Digital Coworker, and yet we’re only processing a tiny fraction of US-based claims activity. This funding will significantly broaden our reach across Insurance companies, where we strive to liberate Claims Adjusting personnel to engage and focus on their end-customer when that customer needs them most.

Today, Roxanne can:

• Read and understand data held within documents and data (from emails, forms, systems etc)
• Make decisions around customer and claims identity
• Update systems and transact data to support all stages of the Claims Process (from FNOL to subrogation)
• Work with colleagues to troubleshoot anomalies and exceptions

We aim to expand Roxanne’s ability to read, understand, and process unstructured insurance documents and use insurance software without prior training or scripting. If she works at Berkshire Hathaway today, she should be able to work at Chubb tomorrow without skipping a beat.

Check out Roxanne’s capabilities here or request a personalized demo here

2. Expand our team and market coverage

We started with a team of two; today, we are a team of 35. We don’t earn these early accolades without an exceptional team with an overarching purpose: relentlessly focusing on positive outcomes for customers.

We will expand our go-to-market teams to ensure we get our message out to a broader audience. We will invest in our excellent AI/ML, engineering, and operations teams to further innovate our Digital Coworker product to address additional use cases across Insurance.

3. Prep the platform and pursue partnership

Our Digital Coworkers’ underlying platform is architected for most configurations to be completed by Roots employees. We intend to simplify the configuration methodology such that customers and partners (system integrators and consultants) can configure all aspects of a Digital Coworker.

Finally, thank you!

To our Customers: Thank you for putting your trust in us, especially in the early days as we rapidly moved from concept to proven reality. Your feedback, guidance, and stewardship as we evolved the capabilities of the Digital Coworker to meet your needs helped us achieve this amazing milestone.

To the Roots Team:  We have big ambitions, and because of you, we are achieving our goals. I am appreciative and excited to be on this journey with you. I can’t wait to see what we do next!

Lastly, to our Investors: Thank you for your continued support, advice, and guidance.

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Let’s make work more human, together.

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Chaz Perera
Co-Founder & CEO
Roots Automation

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