A leading contender in the acquisition of Cazoo Group’s marketplace operation has emerged as privately owned used-car platform, Motors.co.uk. The potential deal would include Cazoo’s brand and intellectual property assets.
The move to auction off Cazoo’s constituent parts comes after the company invested tens of millions of pounds in sponsorship deals for popular sports such as football, snooker, and darts in a bid to gain market share quickly.
Earlier this week, Cazoo filed a notice of intention to appoint Teneo as administrator, only three years after the company’s successful listing on the New York Stock Exchange with a valuation of $8bn. This filing was made to protect the company from creditors while Teneo finalizes asset sales.
Following an announcement last month about a restructuring of the group, advisors have already sold off a number of assets and dismantled Cazoo’s previous operating model in order to transform it into a marketplace. This has included the sale of Cazoo’s vehicle fleet at a higher-than-anticipated value, reflecting the current shortage of used cars in the market.
In addition, Teneo has reportedly struck a deal with Constellation Automotive, the owner of Cazoo’s rival, Cinch, involving a number of sites and jobs.
Several parties have shown interest in Cazoo’s wholesale operation and other vehicle collection sites, while one industry source has stated that the company’s pivot to a platform model has resulted in an inventory of over 15,000 cars. Cazoo has now become the go-to online vehicle marketplace, where consumers can buy and sell cars under a single brand.
If, as expected, Cazoo enters administration, it would highlight the rapid decline of a company that was once considered one of Britain’s hottest technology start-ups. Founded by Alex Chesterman, the founder of Zoopla, Cazoo raised significant amounts of funding and quickly achieved a ‘unicorn’ valuation of $1bn.
However, following a balance sheet restructuring that saw hundreds of millions of dollars of debt converted to equity, Mr. Chesterman left the business several months ago. An insider has suggested that the formal insolvency proceedings are likely to generate interest in Cazoo’s assets, including its brand.
It remains unclear how much Motors.co.uk or other potential buyers would bid for the marketplace operation. A spokesperson for Cazoo has stated, “Our new marketplace model, where consumers can both buy and sell cars, is revenue-generating and performing ahead of expectations.” They added, “Cazoo has successfully restructured and significantly reduced our cash burn, resulting in a strong cash position of over £95m at the end of April 2024.” They also noted that the platform now has approximately 17,000 cars, which is more than double the volume previously supported, demonstrating the scalability of their technology and the strength of their team.
Neither Motors.co.uk nor Cazoo responded to requests for comment on the potential asset sales.
