McKeel Hagerty joins Yahoo Finance to discuss why his company went public and how media will play a role in the growth.
- If you're looking at stocks and one that's actually trading higher today look no further than Hagerty for car nuts, car geeks, and especially those of us who love classic automobiles, old cars, and by these days, you can be talking about, you know, what is it? A Plymouth Barracuda from the 70s. That's old. Anyway, Hagerty, the insurance company a lot of people use to insure their antique and classic cars, that stock started trading publicly today.
They went public via SPAC, and it's up almost 50%. Who better to talk about where we're headed with all of this than McKeel Hagerty, the CEO from Hagerty. It's good to have you here. I'm going to geek out when I talk about old cars, but congratulations on going public. Why did you decide to do that?
MCKEEL HAGERTY: Thank you. It's a big day for us, big day for, hopefully, the car world. You know, when we started really thinking about what we were seeing during COVID, which was, it was a chance for people to decide the things that they really liked. And, you know, you're a car person. I'm a car person. And people who love cars really know no boundary with what they're willing to spend on it, the time they're willing to spend on it.
But we saw actually fun driving miles go up during COVID. We saw this incredible momentum going into the future. And while I envision maybe doing an IPO three or four years from now, I realize now is really the time for us to go for it, start making the investments to build this future and start knitting this whole fun car world together.
- Do we have, is it a $2 billion just the cars themselves, because there's a whole lot of stuff that gets sold at auction. But in the classic car world, is it a $2 billion, or $2 billion and more market right now?
MCKEEL HAGERTY: Well, if you just look at the auctions between the live auctions and the online auctions, it's about a $2 billion a year world. But it's-- that's just a small percentage of these types of cars that change hands each and every year. You know, you're talking about tens of billions worth of cars that change hands every year between individuals.
And we see that data kind of coming in and out of our world, and we see it through our evaluation tools. We see it through our core insurance business. And it's really been fun to watch, that even in strange times like a pandemic, that people put those chips on the table, and they say you know what? I want to spend more a little bit more time driving for fun. Maybe I won't be commuting so much. So let's go take a fun drive somewhere.
- My idea of fun, as you know McKeel, because we have met before, our Studebakers, although once you get on the road and they break down, that's not a whole lot of fun. But one of the things that--
MCKEEL HAGERTY: That's kind of the artisanal cheese of the car world. So you know, congratulations. You're among friends. Don't worry.
- Look if I could get a '53 or '54 Commander Starlight Coupe, I'd be a happy man, but even a '64 Avanti, which you and I were talking about-- the reason I bring up those cars is people who love cars, even if you don't love cars, you can use the Hagerty valuation tool and you get real time what these vehicles have been selling for and you can see the chart. They go up. They go down. How popular is that?
MCKEEL HAGERTY: That's one of the main reasons people come to visit us online. Is that, you know, people love to shop. Whether you're buying a car, whether you're just thinking about buying a car, whether you want to sell a car, is that we started building out these valuation tools more than a decade ago and put together really an amazing international group of experts as well as the technology to track these types of transactions forever, all over the place.
And it's been fun to watch because you see cars like the Avanti, you see all these unusual really vintage cars, but what we're seeing more and more is cars from the '80s and '90s and even early 2000s, that were really fun sporty cars in many cases, to want to own and they were underappreciated, undervalued. Now they're really starting to ratchet up. And that's what the next generation is interested in. And it's one of the reasons we're so confident in this world going forward into the future.
- I will never under-appreciate my mother's 1978 VW Dasher. Let it live in history. But I do want to ask you, it's more than just the insurance, it's more than the valuation tool, you have a media company. What are the plans, now that you're this public company, if you go to the YouTube page, the. Hagerty YouTube page, there are these phenomenal videos, barn find. You will find a car that you can relate to no matter your age, because it's part of your history. Where do you take the company next?
MCKEEL HAGERTY: Yeah, thanks for watching those videos. You know, we have something like 1.8 million subscribers to our YouTube channel, and it's all great interesting content, I think. It's-- we built it for people like us to be able to kind of just be able to enjoy cars with high quality content. So the media business has been a big part of our world for the past few years.
The non-insurance kind of is maybe core and been with us for a long time. It's about 92% of our revenue. But the 8% that's non-insurance is all this automotive experiential stuff. We've been buying event companies. We bought some fascinating businesses around motorsports, amateur recreational motorsport. We're even building out these clubhouses called Hagerty Garage and Social. People can store their car. You know, have fun together, do events in these kind of facilities. And so you're going to see us very likely do more and more of that stuff to just kind of keep this passion alive.
You know, when so many people ask me this question. Like, what's the future of the car world? You know aren't these things all going to go away? And what we often tell them, is like, there are way more people into cars than you think. And our job is to kind of knit them together, do all this fun stuff around it. And if we sell them insurance, great. If they come to one of our events, great. That's what we're here to do.
So you know, going public is-- it's an exhausting process, I got to tell you. But, you know, hopefully, it will help really give us the resources to start building out this next generation of offers and value to make enjoying cars worthwhile and fun.
- And those of us who enjoy it, can now get in on it through your company. I just want-- for the record, although I have a Studebaker budget, my taste is a 1938 Talbot Lago. If I had, what $20 million? Boy, would I look good in that. Anybody would look good in that.
McKeel Hagerty, congratulations. You're going to be ringing the bell down at NYSE next week. So all the best. Have a great trip here to New York. McKeel Hagerty, the CEO from Hagerty.