Carvana made another big investment move on Monday, this time involving Santander Consumer USA founder Tom Dundon.
The online retailer announced an agreement to raise $100 million of Class A Convertible Preferred Stock in a private placement with Dundon Capital Partners, which was founded by Dundon.
The proceeds will be used for growth opportunities, including market expansion.
“Tom Dundon has been a highly successful pioneer in the automotive industry, including founding Santander Consumer USA, and we’re excited to have him as a partner,” Carvana chief executive Ernie Garcia said in a news release.
“This deal gives us flexibility to pursue valuable growth opportunities, including opening additional markets, while continuing to focus on our path to profitability.”
Dundon was the founder of SCUSA and spent 20 years with the company (including nine as CEO), before stepping down in 2015. He remained on its board of directors.
Carvana said in a news release it aims to generate the proceeds by issuing and selling 100,000 shares of a newly created series of Class A Convertible Preferred Stock.
The transaction will be privately negotiated and “exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and the rules and regulations promulgated thereunder,” the company said.
“I’ve been watching Carvana from afar for years and while the size of the opportunity to bring automotive retail online has always been interesting, their operational success of late has really impressed me,” Dundon said. “I couldn’t be more excited to be involved with such a dynamic company.”
Carvana, which went public earlier this year, will be this week, including the Wells Fargo Technology Summit on Tuesday.