Online car platform Cazoo eyes blockbuster £6bn public offering

Cazoo, the online car retailer founded by one of Britain’s best-known technology entrepreneurs, is plotting a blockbuster move to go public with a valuation of well over £5bn.

Sky News has learnt that Cazoo, which was launched by Alex Chesterman just a year ago, is working with bankers at Credit Suisse, Goldman Sachs and Numis on options for accelerating its growth prospects.

City sources said on Friday that this could involve a London listing, but that a merger with a New York-listed special purpose acquisition company was at least as likely an outcome.

Any move to go public would not take place until much later in the year, but would underscore the explosive growth of Mr Chesterman’s latest venture.

Cazoo has already raised £450m from an array of blue-chip investors – a staggering sum for a British start-up founded just two years ago.

The London Stock Exchange is expected to push hard for Cazoo to list in its home market, but sources said that the company’s founders had already been approaching potential investors about the idea of a SPAC deal in the US.

SPACs have raised tens of billions of dollars this year alone, persuading a spectrum of tech-enabled companies in clean energy, healthcare, urban mobility and space travel to take themselves onto the public markets.

Cazoo has built a workforce of around 2,000 people, partly through a number of acquisitions.

If it succeeded in securing a valuation as high as £6bn, it would potentially add another £1.8bn to Mr Chesterman’s already-sizeable wealth by virtue of his 30% stake in the company.

In a statement issued to Sky News, a Cazoo spokesman said on Friday: “Cazoo is pioneering the shift to online car buying in the UK and, since our launch just over a year ago, we have already sold almost 20,000 cars to consumers across the UK who have embraced the selection, transparency and convenience of buying high quality used cars entirely online.

“As one of the UK’s fastest growing businesses, with revenues of over £160m in our first year alone, it is not surprising that there is speculation around whether or when we might IPO but we do not comment on speculation and should we have an announcement to make on this or any other matter we shall do so at the appropriate time.”

Mr Chesterman, who founded successful start-ups Lovefilm and Zoopla, has raised money from backers such as Fidelity and D1 Capital Partners, which has also invested in the payments group TransferWise.

Cazoo, which sponsors Premier League teams Aston Villa and Everton, claims to be transforming the little-changed method of buying a used car by having it delivered to a customer’s door within as little as 72 hours.

It claims to have become “the country’s leading online car retailer” since its launch, even as the market for new cars has plummeted to sales levels not seen since the immediate aftermath of the Second World War.

Cazoo competes with rivals such as Cinch, which is owned by BCA Marketplace.

Investors in the sector say that on a relative basis, the business had become more attractive because of the prospective shift of consumers to digital channels once the pandemic abates.

Mr Chesterman came up with the idea for Cazoo soon after leaving the property portal Zoopla, which he sold in a deal worth more than £2bn to the tech-focused buyout firm Silver Lake in 2018.

“Used cars are one of the last remaining consumer markets yet to benefit from any digital transformation,” the entrepreneur said soon after its launch.

“Cazoo makes used car buying simple and convenient like buying any other product online today.

“We take away the need to travel, to haggle, to spend countless hours at a dealership and to risk any buyer’s remorse.”

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