Cazoo – the online used car retailer founded in 2018 – is set to go public on the New York Stock Exchange in a floatation valuing the business at $7bn (£5bn).
It has merged with special purpose acquisition company (SPAC) Ajax I ahead of the listing, with Ajax founder and investor Dan Och joining its board of directors as part of the deal.
Cazoo CEO Alex Chesterman, who has previously sold rental service Lovefilm and property market services firm Zoopla for £200m and £2.2bn respectively, believes the move will help accelerate the firm’s growth in Europe.
“This announcement is another major milestone in our continued drive to transform the way people buy cars across Europe,” he said. “We’ve created the most comprehensive and fully integrated offering in the largest retail sector which currently has very low digital penetration.
“This deal will provide us with almost $1bn [£723m] of further funds to fuel our growth, and I’m delighted to be partnering with Dan and his team at AJAX to rapidly expand and deliver the best car buying experience to consumers across Europe.”
Cazoo estimates that less than 2% of Europe’s used car market can be accounted for by online sales and says that the market is worth around $700bn (£500bn).
So far, it has delivered 20,000 cars to customers in the UK and claims to be Europe’s leading car subscription provider, with more than 6000 subscribers across France, Germany and the UK.
Cazoo owns and reconditions all of the cars it sells, with the buying process completed entirely online. Customers are given a money-back guarantee if they’re unsatisfied with any vehicle they buy.
It claims to be one of Europe’s fastest-growing digital businesses, with growth of more than 300% year on year and anticipated revenues of nearly $1bn (£723m) in 2021. It employs around 1800 people.
“We’re incredibly excited to have the opportunity to partner with Alex and the exceptional team at Cazoo,” said Och. “Alex has proven to be one of Europe’s most successful serial entrepreneurs, and we’re proud to be supporting the growth of this world-class team, brand and platform.
“With their constant focus on innovation, data and customer satisfaction, I have no doubt that Cazoo is going to continue to lead the way in this massive, untapped market opportunity and am looking forward to joining the board of Cazoo and working with Alex and his team.”