Chicago Tribune (Sunday)
Carvana’s new Root partnership to offer insurance with vehicle-buying
Online used-car dealer Carvana is investing $126 million into insurer Root as part of a new partnership in which Root will develop auto insurance programs for Carvana’s online car-buying platform.
The partnership will allow Carvana to offer personalized insurance quotes as part of the car-buying experience, Root said. At the same time, it will allow Root add to customers at attractive costs.
“This partnership further elevates the Carvana experience by integrating insurance alongside car purchasing and financing decisions,” Root CEO Alex Timm said in a statement. “This integrated solution will give Root exclusive access to a scaled and growing channel of prospective customers at the important insurance decision point of buying a car.”
Carvana CEO Ernie Garcia welcomed the partnership.
“In Root, we have found a partner that shares our customer focus and technology-driven approach to delivering exceptional customer experiences. We are excited to build on the success of our existing partnership by creating a unique, integrated solution,” Garcia said in a news release.
Under the terms of deal, the investment can ultimately be converted into shares that would give Carvana a 5% stake in Root.
The deal didn’t do anything for Root’s struggling stock price.
Root’s stock fell after the company posted results for its second quarter that came in below analyst expectations.
Young public companies typically aren’t profitable, but Root’s losses for the quarter were worse than expected.