Business

Motors.co.uk among suitors raiding stricken Cazoo’s garage sale

A privately owned used-car platform is circling Cazoo Group, its stricken US-listed rival which is on the brink of administration.

Sky News has learnt that Motors.co.uk is a leading contender to acquire Cazoo’s marketplace operation, which would include its brand and intellectual property assets.

The process to auction the used-car platform’s constituent parts comes after it spent tens of millions of pounds on sponsorship deals in football, snooker and darts in a rapid attempt to gain market share.

Earlier this week, Cazoo filed a notice of intention to appoint Teneo as administrator, just three years after it floated in New York with a valuation of $8bn.

The filing was intended to provide protection from creditors while Teneo finalises asset sales.

Since an announcement last month about a restructuring of the group, advisers have offloaded a string of assets and unwound Cazoo’s previous operating model to transform it into a marketplace.

Among those have been the disposal of Cazoo’s vehicle fleet, which sources said had been achieved at higher-than-anticipated values, reflecting a current shortage of used cars in the market.

Teneo is also said to have struck a deal with Constellation Automotive, the owner of Cazoo’s rival, Cinch, involving a handful of sites and dozens of jobs.

Meanwhile, several parties are understood to have expressed an interest in Cazoo’s wholesale operation and other vehicle collection sites.

One industry source said the pivot to a platform model had seen its inventory rise to more than 15,000 cars, with Cazoo now the online vehicle marketplace where consumers can buy and sell cars under a single brand.

If, as expected, the group does fall into administration, it would underline the rapid implosion of a company which once ranked among Britain’s hottest technology start-ups.

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Founded by Alex Chesterman, the founder of Zoopla, it raised hundreds of millions of pounds in funding, and rapidly attracted a ‘unicorn’ – or $1bn – valuation.

Mr Chesterman left the business several months ago in the wake of a balance sheet restructuring which saw hundreds of millions of dollars of debt converted to equity.

One insider said the formal triggering of insolvency proceedings was likely to attract wider attention in Cazoo’s assets, including its brand.

It was unclear on Friday how much Motors.co.uk or other suitors for the marketplace were likely to bid for it.

Alex Chesterman, Founder of Cazoo Ltd
Image:
Cazoo founder Alex Chesterman left the business several months ago

A spokesperson for Cazoo said: “Our new marketplace model, where consumers can both buy and sell cars, is revenue generating and performing ahead of expectations with interest from almost 100 car dealers including many household names wishing to trade on the Cazoo platform.

“Cazoo has successfully restructured and significantly reduced the cash burn of the group, resulting in a cash position in excess of £95m at 30th April 2024 compared to £113m at 31st December 2023, and the platform now has approximately 17,000 cars which is more than double the volume we previously supported and demonstrates the scalability of our technology and the strength of the team.

“We are making efforts to secure the next phase of our business and are grateful to our employees for their hard work and commitment.”

Motors.co.uk did not respond to enquiries, while a spokesperson for Cazoo declined to comment on talks about asset sales.

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