Cazoo is urgently searching for buyers as it seeks to stave off potential collapse after two deeply challenging years.
The used car marketplace filed a notice of intention last week with the High Court to appoint administrators for some of its subsidiaries.
Sky News recently reported that online retailer Motors.co.uk was seeking to acquire Cazoo’s marketplace operation, including its brand and intellectual property assets.
Needing direction: Used car marketplace Cazoo is urgently searching for buyers as it seeks to stave off potential collapse after two deeply challenging years
It also claimed that Teneo, Cazoo’s recovery adviser, had made an agreement with Constellation Automotive, the owner of Cinch, entailing a small number of sites and dozens of jobs.
Cazoo’s downfall marks a dramatic turn from the lockdown era when the temporary closure of physical car dealerships led to a surge in people buying vehicles online.
In 2021, it became one of the fastest-ever unicorns – privately-held businesses worth at least $1billion – and floated on the New York Stock Exchange with a £6billion valuation.
Cazoo was set up three years previously by Alex Chesterman, the founder of Zoopla LoveFilm, who modelled the company on Carvana, the American retailer known for storing cars in glass tower vending machines.
However, while the firm’s sales kept rising after Covid-related restrictions ended, its huge losses – $704million in 2022 – forced the group to make major redundancies and close its European Union operations.
Chesterman departed the business last year after it exchanged $630million of debt for $200million in bonds and shares. By that point, Cazoo was worth a mere $12million.
Despite financial difficulties, Cazoo has spent millions sponsoring numerous sporting organisations, 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.
Back in March, Cazoo told investors it was selling off its used cars and transitioning into a vehicle marketplace, with an eye to competing with rivals like AutoTrader and AA Cars.
When announcing the plan, the firm said it would ‘leverage our key advantages: our ‘brand, which is recognisable and trusted nationwide, and our technology platform, which provides a market-leading customer experience.’
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