Leading British online car seller, Cazoo Limited, is reportedly making its long-anticipated stock market debut as it seeks a listing in New York instead of its hometown of London with the help of a Spac (special-purpose acquisition company). The supposed deal effectively values the car retailer at over $7 billion (£5 billion).
According to reports, under the Spac-deal, Cazoo would be merging with Ajax I, a U.S. based enterprise led by billionaire investor, Dan Och. This move makes Cazoo the latest firm to take advantage of the rapidly growing Spac trend.
Spacs are essentially ‘blank cheque’ enterprises that are increasingly becoming popular as an affordable alternative for private firms to go public.
The news, however, comes as a severe blow to London as well as the London Stock Exchange, who had apparently lobbied for the retailer to be listed in the hometown market. The UK government is scrambling to upgrade the country’s listing rules to effectively help make London an appealing marketplace for high-growth companies and startups to float.
Meanwhile, reports cite, the deal is slated to facilitate Cazoo a funding of approximately $1.6 billion to drive its growth and also expand its operations throughout Europe. The car retailer, which provides employment to more than 1,800 individuals across UK, Portugal, France, and Germany, stated that it is estimating revenues of approximately $1 billion for 2021, which is a 300% jump as compared to a year prior.
Cazoo, founded back in 2018 by Alex Chesterman, who is the company’s current chief executive, would be bringing Och on to its board under the Spac merger deal. Cazoo has often been called the Amazon of used car market. It purchases and inspects cars before listing them online with an aim to collect or deliver vehicles within as little as 72 hours.
Chesterman stated that the announcement is yet another milestone in the company’s continued drive towards transforming the way people purchase cars in Europe. Cazoo has created one of the most comprehensive as well as fully integrated offering within the biggest retail sector, which presently has a very low level of digital penetration.