The Rise and Fall of Cazoo
Cazoo , the online used car retailer founded by serial entrepreneur Alex ChestermanDealroom has a profile for this one. Try Dealroom → OBE in 2018, entered administration in May 2024 — just three years after listing on the New York Stock Exchange at a $7 billion valuation via a SPAC merger with AJAX IDealroom has a profile for this one. Try Dealroom →.
Chesterman, previously co-founder of LoveFilm (sold to Amazon) and founder of ZooplaDealroom has a profile for this one. Try Dealroom → (sold to Silver LakeDealroom has a profile for this one. Try Dealroom → for £2.2 billion), launched Cazoo with a mission to make buying a car as simple as buying any other product online. The company achieved unicorn status in just 18 months — a UK record at the time — and grew to approximately 5,000 staff across the UK and Europe. Revenues reached £1.2 billion in 2022. An aggressive marketing blitz saw Cazoo sponsor Premier League clubs Aston Villa and Everton, plus darts, horse racing, snooker, and fishing events.
In August 2021, Cazoo completed its NYSE listing via SPAC merger at a $7 billion valuation. An $800 million PIPE (private investment in public equity) accompanied the deal, with investors including Morgan StanleyDealroom has a profile for this one. Try Dealroom →, BlackRock, Fidelity Investments, Altimeter Capital, D1 Capital Partners, Senator Investment GroupDealroom has a profile for this one. Try Dealroom →, Mubadala Capital, Pelham CapitalDealroom has a profile for this one. Try Dealroom →, Marcho PartnersDealroom has a profile for this one. Try Dealroom →, and Spruce HouseDealroom has a profile for this one. Try Dealroom →. Chesterman reportedly cashed in approximately £100 million in shares months before the listing.
Cazoo reported pre-tax losses of £531.5 million in 2021 and £525.5 million in 2022 despite never turning a profit. Industry insiders pointed to a fatal flaw: Cazoo depended on BCA (British Car Auctions) and WeBuyAnyCar for its vehicle supply chain but did not own it. When BCA's parent launched competitor Cinch, Cazoo's supply was effectively cut off. Rapid European expansion — acquiring brumbrum, Cluno, and Swipcar — was reversed within 12 months. The company retreated from Germany, France, and Italy, made hundreds redundant, and sold off businesses for less than it paid.
The share price collapsed by approximately 98%, and in January 2023 Chesterman stepped down as CEO. In December 2023, a $630 million debt-for-equity swap ceded majority control to US hedge fund Viking Global InvestorsDealroom has a profile for this one. Try Dealroom →, diluting Chesterman's 24.3% stake to near zero. He departed the company entirely at that point.
A last-ditch pivot to an advertising marketplace model (akin to Auto TraderDealroom has a profile for this one. Try Dealroom →) came too late. In May 2024, Cazoo entered administration. Restructuring advisers from Teneo were appointed. The remaining assets were ultimately acquired by MOTORSDealroom has a profile for this one. Try Dealroom → for approximately $5 million.
When the BBC asked Chesterman for comment on Cazoo's collapse into administration, he said he had not had any involvement with the company for more than 18 months and declined to comment further.
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