Clearcover is the auto insurance company that decided the best way to compete with Geico and Progressive wasn’t with a cute mascot but with lower prices. Kyle Nakatsuji built a digital-first car insurance platform that passes operational savings directly to customers. $355 million raised on the premise that if you strip out agent commissions and paper processes, auto insurance can be 20% cheaper. Simple thesis. Hard execution.
Founded
2016
HQ
Chicago, USA
Total Raised
$355 million
Founder
Kyle Nakatsuji
Status
Private
Website
www.clearcover.comTHE ORIGIN STORY
Kyle Nakatsuji was a corporate development executive at American Family Insurance when he realized the entire auto insurance industry was built on bloated distribution costs. Agents, branches, paper applications — all adding cost without adding value.
He founded Clearcover in Chicago in 2016 to build auto insurance from scratch using technology. The pitch: same coverage, 20% cheaper, because you buy it on your phone instead of through an agent.
WHAT THEY ACTUALLY DO
Clearcover sells auto insurance policies directly to consumers through its website and app. Revenue is premium income minus claims and operating costs.
By eliminating agent commissions (typically 10-15% of premiums) and using automated underwriting, Clearcover aims for a lower cost structure than traditional insurers.
The company uses AI for underwriting, claims processing, and fraud detection, which reduces operational costs further.
THE PRODUCTS
Auto insurance policies with instant online quotes. AI-powered claims processing for fast resolution.
Mobile app for policy management, ID cards, and claims filing. Bundle options with home and renters insurance through partners.
HOW THEY GREW
Price leadership — being consistently 20%+ cheaper than competitors in the same coverage category. Digital distribution through comparison sites and direct marketing.
Expansion state by state across the U.S.
THE HARD PART
Auto insurance is brutally competitive. Geico, Progressive, and State Farm spend billions on advertising.
Getting noticed as a startup against a gecko, a talking box, and Jake from State Farm requires creative distribution. Loss ratios need to be carefully managed — pricing too low to attract customers while still making money is the eternal insurtech tightrope.
MONEY TRAIL
Series A
2017 · Led by Lightbank
$12M raised
Series B
2019 · Led by Cox Enterprises
$43M raised
Series C
2020 · Led by American Family Ventures
$50M raised
Series D
2021 · Led by Eldridge
$200M raised
WHO BACKED THEM
Eldridge led the Series D. Earlier investors include American Family Ventures, Cox Enterprises, and Lightbank.
Total funding of approximately $355 million.
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