You won’t have missed the news that Cazoo is floating on the NY Stock Exchange for the eye-watering figure of £5 billion (with a ‘b’) via a special-purpose acquisition company (Spac), which is a ‘blank cheque’ company accepted as a cheaper way for private companies to go public.
Let’s not forget that chief exec Alex Chesterman only launched Cazoo in 2018 and the float should give his company over £1 billion to invest in growth. They already employ up to 2,000 people in the UK and Europe and aim for revenues of around $1 billion this year.
Massive and highly-experienced investors are reportedly lining up to grab a slice of the Cazoo action, including funds and accounts managed by BlackRock, Counterpoint Global (Morgan Stanley) and Fidelity Management and Research Company LLC.
As Mr Chesterman said: “This announcement is another major milestone in our continued drive to transform the way people buy cars across Europe.”
But what does it say for the rest of the retail motor industry?
Speaking to AM a few days ago, Vanarama chief exec Andy Alderson said his online leasing business is also hugely optimistic about click-based growth, aiming for revenues of over £2.5 billion (with another ‘b’) by 2025. Alderson said: “I think what a lot of people don’t get is that to be in any form of retail now you don’t need the bricks, but you absolutely need the clicks.
“Before COVID, in 2018, Auto Trader did a report which found that 13 to 14% of car buyers would consider buying a vehicle online. That’s now 60%,” he told AM.
Alderson said that Cazoo’s influence is drawing attention to online car retail was helping to “pave the way” for his operation.