Automotive lifestyle brand Hagerty, recognised as a leading specialty insurance provider for the global automotive enthusiast market, has announced a capital raise of $105m.
The funding comes from existing strategic investors, which include insurance giants such as State Farm, Markel Group, and members of the Hagerty family.
The funding comprises $80m of convertible preferred equity, which was finalised on June 23rd, 2023. Additionally, there’s a $25m commitment of long-term debt financing for Hagerty Reinsurance Limited. The newly raised capital will be instrumental in propelling Hagerty’s profitable growth initiatives that are geared towards the car enthusiast community.
Hagerty has made a name for itself as an automotive lifestyle brand that caters to a market of over 67 million self-described car enthusiasts across the US, Canada, and the UK. The company provides specialty vehicle insurance, expert car valuation data and insights, car auction services, events and automotive entertainment.
The recent capital infusion is earmarked for two main objectives: evolving Hagerty’s risk appetite and core product to enhance offerings for current members and attracting new members from the pool of 33 million enthusiast vehicles in the United States. The funds will also facilitate ongoing technology investments aimed at driving operating efficiencies and improving customer-facing interactions.
State Farm’s chairman, president and chief executive officer Michael Tipsord said, “We are pleased to continue to grow our investment in Hagerty and help support their strategic business objectives as we prepare for the upcoming launch of our commercial relationship.”
Tom Gayner, chief executive officer of Markel Group, added, “Hagerty is an important partner for our insurance business, and we are excited to see them further expand their insurance offerings by finding new and innovative ways to serve automotive enthusiasts.”
Hagerty’s chief executive officer McKeel Hagerty concluded, “We have been working diligently over the last six months to deliver improved profitability and margin expansion, while making the investments necessary to sustain our growth trajectory for many years to come. We believe that the additional capital positions us well during uncertain economic times to execute against our significant growth opportunities.”
Additional details about the capital raise can be found on Hagerty’s investor relations website at investor.hagerty.com
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