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Carvana and Root, Inc. Exclusively Partner to Develop Industry-First Integrated Auto Insurance Solutions for Carvana Customers

Carvana | August 12, 2021

Carvana (NYSE: CVNA), the leading e-commerce platform for buying and selling used cars, and Root, Inc. (NASDAQ: ROOT), the parent company of Root Insurance Company (“Root”), the leading insurtech carrier, today announced an exclusive partnership to develop integrated auto insurance solutions for Carvana’s online car buying platform. In connection with the partnership, Carvana will invest approximately $126 million in Root, Inc., subject to customary regulatory approvals.

“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, which positions us to deliver on an immediate customer need and drive sustainable policyholder growth.”

“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,” said Carvana CEO Ernie Garcia. “We look forward to introducing our customers to Root’s seamless insurance process and believe that this integrated offering will deepen and extend our customer relationships between transactions.”

“Carvana has revolutionized the used car buying experience for consumers. This partnership further elevates the Carvana experience by integrating insurance alongside car purchasing and financing decisions,” said Root CEO Alex Timm. “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, which positions us to deliver on an immediate customer need and drive sustainable policyholder growth.”

Under the terms of the investment agreement, Carvana will invest approximately $126 million of primary capital in Root, Inc. in a convertible preferred security, convertible at $9.00 per share, into approximately 14 million Class A shares in Root, Inc., or an ownership interest of approximately 5% on a fully diluted basis as of today. The investment agreement also provides CAbout Caarvana with warrants for Class A shares in Root, Inc. that are linked to the performance of the commercial partnership.

Ardea Partners LP is serving as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal counsel to Root in connection with this transaction

About Carvana

Founded in 2012 and based in Phoenix, Carvana’s (NYSE: CVNA) mission is to change the way people buy cars. By removing the traditional dealership infrastructure and replacing it with technology and exceptional customer service, Carvana offers consumers an intuitive and convenient online car buying and financing platform. Carvana.com enables consumers to quickly and easily shop more than 45,000 vehicles, finance, trade-in or sell their current vehicle to Carvana, sign contracts, and schedule as-soon-as-next-day delivery or pickup at one of Carvana’s proprietary automated Car Vending Machines.

About Root, Inc.

Root, Inc. is the parent company of Root Insurance Company. Root is a technology company revolutionizing personal insurance with a pricing model based upon fairness and a modern customer experience. Root’s mobile-first customer experience is designed to make insurance simple.

Spotlight

After months of strategy and budget meetings, you’ve got the green light – it’s time to begin building your company’s quality assurance program. But are you prepared for the realities of the creation process? Can you address the inevitable questions and setbacks as they appear?

Spotlight

After months of strategy and budget meetings, you’ve got the green light – it’s time to begin building your company’s quality assurance program. But are you prepared for the realities of the creation process? Can you address the inevitable questions and setbacks as they appear?

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