Used car marketplace Cazoo is looking for buyers as it nears collapse
- Cazoo submitted an intention to appoint administrators last week
- Motors.co.uk is reportedly looking to acquire Cazoo’s marketplace business
Cazoo is urgently looking for buyers to avoid a possible collapse after two very challenging years.
The used car marketplace filed a notice of intent in the High Court last week to appoint administrators for some of its subsidiaries.
Sky News recently reported that online retailer Motors.co.uk attempted to acquire Cazoo’s marketplace businessincluding the brand and intellectual properties.
Direction needed: Used car marketplace Cazoo is urgently looking for buyers in a bid to avoid a possible collapse after two very challenging years
It also alleged that Teneo, Cazoo’s recovery consultant, struck a deal with Constellation Automotive, Cinch’s owner, that brought with it a small number of locations and dozens of jobs.
Cazoo’s demise marks a dramatic turn from the lockdown era, when the temporary closure of physical car dealerships led to a surge in people buying cars online.
In 2021, it became one of the fastest unicorns ever – private companies worth at least $1 billion – and floated on the New York Stock Exchange with a £6 billion valuation.
Cazoo was founded three years earlier by Alex Chesterman, the founder of Zoopla LoveFilm, who modeled the company on Carvana, the US retailer known for storing cars in glass tower vending machines.
However, although the company’s sales continued to rise after Covid-related restrictions ended, huge losses – $704 million in 2022 – forced the group to make major layoffs and close operations in the European Union.
Chesterman left the company last year after exchanging $630 million in debt for $200 million in bonds and stock. At the time, Cazoo was only worth $12 million.
Despite financial difficulties, Cazoo has spent millions sponsoring numerous sporting organizations such as the Welsh Rugby Union, the Professional Darts Corporation and the World Snooker Championship.
It used to sponsor the Hundred Cricket Tournament and many prominent European football teams, including Aston Villa, Bologna, Valencia and Olympique Marseille.
In March, Cazoo told investors it was selling its used cars and transitioning to a car marketplace, aiming to compete with rivals such as AutoTrader and AA Cars.
Announcing the plan, the company said it would leverage “our key advantages: our “brand, which is nationally recognizable and trusted, and our technology platform, which delivers a market-leading customer experience.”