How major car dealer went from sponsoring Premier League teams to administration and cutting hundreds of jobs
IT was the go-to online car retailer that exploded over the pandemic and sponsored Aston Villa, Everton, the darts and snooker.
Even if you hadn’t used Cazoo, you would’ve certainly heard of it.
At its peak, the company was valued at £5 BILLION and employed 4,500 people in 2021.
But last week it tumbled into administration with more than 720 job losses.
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Now valued at just $30 million, how did a company which revolutionised the car industry run out of road?
Cazoo was the brainchild of serial web entrepreneur Alex Chesterman who set up property website Zoopla and LoveFilm.
After raising more than £30m for his venture into the used car market, Cazoo launched in December 2019.
At the time, Car Dealer magazine described it as “one of the UK’s most exciting new tech businesses“.
The concept was simple: give Brits the power to buy, part-exchange and finance vehicles entirely online.
This format saw Cazoo’s popularity go stratospheric when the country was thrown into lockdown.
Cazoo’s fortunes were also buoyed by a worldwide microchip shortage that disrupted new vehicle manufacturing and saw used car prices explode.
Speaking in 2020, Mr Chesterman said Cazoo was “reinventing the used car buying experience“.
This, he said, was by “providing the best selection, value, quality and convenience for UK car buyers“.
In June 2020, the firm signed a three-year partnership deal with Aston Villa which Mr Chesterman hoped would “turn Cazoo into a household brand”.
By the end of 2020, 14,981 vehicles had been sold on the website, rising to 49,853 the following year.
In August 2021, Cazoo was listed on the US stock market as sales rocketed from £20 million to £141 million.
Despite soaring sales and being plastered on the shirts of Villa and Everton, the firm recorded a £550 million loss that year.
In its 2022 financial results, revenue stood at a whopping £1.25bn and over 120,000 cars had been sold entirely online since launch.
But financial woes continued to pester the used car titan.
By May 2022, Mr Chesterman told his investors Cazoo “may never achieve profitability” and sweeping cuts were made in an attempt to save £200 million.
BOOTED OUT
At the end of the 2022/23 season, Everton kicked Cazoo’s shirt sponsorship into the long grass before Villa said adios in January last year.
Mr Chesterman stepped aside as CEO the same month – he left the company in December.
By June 2023, the firm backed out of a €4 million shirt sponsorship they’d signed with six-time La Liga champs Valencia CF in 2022 amid a racism row.
The Spaniards, whose squad includes ex-Brentford star Sergi Canós, were later sanctioned with a partial stadium closure for five matches following the racist abuse of Real Madrid forward Vinicius Jr.
With Paul Whitehead at the helm of the ailing used car dealer, Cazoo’s fortunes got no better and job losses followed in March.
Cazoo told the BBC it explored “strategic alternatives” to insolvency, including selling off parts of the business, as it struggled to raise cash, but no buyer came forward.
On May 21, Cazoo went into administration with hundreds of jobs axed.
BMW, Motorpoint and Car Gurus are among the parties reportedly interested in buying Cazoo’s marketplace.
In a statement last week, 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.”
The Sun approached Cazoo for comment.