Administrators to Cazoo, the British online car retailer once valued at well over £5bn, are closing in on a deal to offload its marketplace division.
Sky News has learnt that Motors.co.uk, a privately owned used-car platform, is now the frontrunner to buy Cazoo’s brand and marketplace business.
Industry sources said the price was likely to be a significant discount to the investment that Cazoo had ploughed into sports sponsorship deals in a bid to build brand awareness since the company launched in 2018.
Cazoo crashed into administration last month, having failed to put itself on a sustainable footing after a debt restructuring last year.
Teneo, which is handling the administration, has sold a number of Cazoo’s operations, with hundreds of staff losing their jobs as a result of the administration.
Its wholesale arm was sold to G3, another industry player, with Constellation Automotive, the owner of Cazoo’s rival, Cinch, also having acquired a number of assets from the stricken New York-listed company.
Cazoo was founded by Alex Chesterman, the successful entrepreneur behind Zoopla, the property portal.
It raised several tranches of funding at ever-higher valuations before making its stock exchange debut in 2021, when investors ascribed a valuation of $8bn to it.
Cazoo spent tens of millions of pounds on sponsorship deals in football, snooker and darts in an attempt to build market share.
One industry source said recently that Cazoo’s pivot to a platform model had seen its inventory rise to more than 15,000 cars.
It is now the only online vehicle marketplace where consumers can buy and sell cars under a single brand.
Mr Chesterman left the business several months ago in the wake of a balance sheet restructuring which saw hundreds of millions of dollars of debt converted to equity.
Cazoo said last month: “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 company added that it had “successfully restructured and significantly reduced the cash burn of the group”.
Neither Motors.co.uk nor Teneo could not be reached for comment.
Content Source: news.sky.com