Administrators overseeing the insolvency of Cazoo, the British online car retailer formerly valued at over £5bn, are in the final stages of securing a deal to sell its marketplace division.
According to industry sources, the frontrunner to acquire Cazoo’s brand and marketplace business is Motors.co.uk, a privately owned used-car platform. The price is expected to be significantly lower than the amount the company had invested in sports sponsorship deals since its launch in 2018, in an effort to establish brand recognition.
Cazoo entered administration last month after failing to establish a sustainable business model following a debt restructuring in the previous year. The administration, managed by Teneo, has resulted in the sale of various Cazoo operations, leading to hundreds of layoffs.
G3, another industry player, has acquired Cazoo’s wholesale arm, while Constellation Automotive, the owner of Cazoo’s competitor, Cinch, has acquired several assets from the struggling New York-listed company.
Cazoo was founded by successful entrepreneur Alex Chesterman, known for his involvement in Zoopla, a popular property portal. The company had raised multiple rounds of funding at increasing valuations before going public in 2021, with investors valuing it at $8bn.
In an attempt to gain market share, Cazoo spent millions of pounds on sponsorship deals in football, snooker, and darts. However, a recent pivot to a platform model saw its inventory grow to over 15,000 cars, making it the only online vehicle marketplace where consumers can both buy and sell cars under a single brand.
Mr. Chesterman stepped down from the company several months ago after a balance sheet restructuring that converted hundreds of millions of dollars of debt into equity. In a statement last month, Cazoo declared that its new marketplace model, which allows for both buying and selling, had exceeded expectations, with nearly 100 car dealers, including well-known brands, expressing interest in trading on the Cazoo platform.
Neither Motors.co.uk nor Teneo could be reached for comment.
