Online car retailer Cazoo is to go public in the US via a blank cheque company, known as a SPAC.
The company has agreed a $7 billion valuation as part of the merger with Ajax I, a shell company led by billionaire investor Dan Och which is publicly listed in New York. Public listings via SPACs in the US are growing in popularity as a faster way of listing a company.
Cazoo, founded by serial entrepreneur Alex Chesterman in 2018, was valued at $2.6bn in its latest private funding round last October. It will be named Cazoo after the merger.
AJAX is a $805m SPAC founded by Och in partnership with Glenn Fuhrman and a team of strategic advisors including the founders of Chipotle, Instagram, Square and 23andMe.
Cazoo is pioneering the shift to online car buying in Europe and has already delivered more than 20,000 cars to consumers across the UK. Following its recent acquisitions, Cazoo is also now Europe’s leading car subscription player with over 6,000 subscribers across the UK, Germany and France. It is now planning international expansion.
Cazoo owns and reconditions all its cars before offering them for sale on its website for either delivery or collection in as little as 72 hours. As one of Europe’s fastest-growing businesses, Cazoo expects to achieve revenues approaching $1bn in 2021, a growth rate of more than 300% in its second full year of operations and has already built a team of over 1,800 across the UK, Germany, France and Portugal.
“This announcement is another major milestone in our continued drive to transform the way people buy cars across Europe,” said Chesterman. “We have 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 $1 billion of further funds to fuel our growth and I am 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.”
Och said: “We are incredibly excited to have the opportunity to partner with Alex and the exceptional team at Cazoo.
“Alex has proven to be one of Europe’s most successful serial entrepreneurs and we are 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.”