Cazoo, the UK used-car gross sales portal that has been on a serious fundraising tear within the final yr, will likely be subsequent firm to pursue extra development by the use of a SPAC: the corporate at the moment introduced that it’s going to checklist on the NYSE by the use of a enterprise mixture with AJAX I, a particular function acquisition car based by hedge fund supremo Dan Och in partnership with Glenn Fuhrman and others.
The deal values Cazoo at $7 billion and also will embrace an additional $1.6 billion in new financing: $805 million money from AJAX I itself and an $800 million PIPE led by the AJAX sponsors and D1 Capital Companions, with Altimeter, BlackRock, Counterpoint World (Morgan Stanley), Constancy Administration, Marcho Companions, Mubadala Capital, Pelham Capital, Senator Funding Group and Spruce Home Partnership additionally collaborating, a mixture of earlier and new Cazoo buyers. The deal has already been accepted by the boards of Cazoo and AJAX I.
The corporate plans to make use of the proceeds of this to proceed increasing throughout Europe after a bumper yr. It mentioned it noticed gross sales develop by over 300% and is on observe for 2021 revenues to method $1 billion, with an ARR of $600 million within the first quarter.
Cazoo’s deal is a transparent marker of how ubiquitous SPACs have grow to be as an choice for scaling, privately-held firms with some huge cash already on their cap tables to take the subsequent step wanting a full IPO on their very own steam — a prolonged course of that may not match their financials or time constraints — or getting acquired.
It exhibits some leverage on the a part of buyers to usher in their very own financing and strategic management to direct the businesses as extra than simply monetary backers, and certainly Dan Ochs will likely be becoming a member of Cazoo’s board. But additionally represents one other approach for them to get in on what seem like sturdy companies in the long run, at a time when expertise continues to be an enormous enterprise alternative.
Within the case of Cazoo, the corporate has been in the correct place on the proper time, it appears. In a yr the place folks stayed away from in-person buying within the the UK, it offered and delivered 20,000 vehicles. It plans to develop each that gross sales portal and different companies strains, akin to a automobile subscription service it runs, which at the moment has 6,000+ subscribers within the UK, Germany and France. The corporate was based in 2018 and within the midst of the pandemic final yr raised $427 million in funding, first $116 million in March 2020 after which a further $311 million in October. The latter spherical valued Cazoo at simply over $2.5 billion, which means that this newest SPAC represents an enormous worth hike.
“This announcement is one other main milestone in our continued drive to rework the best way folks purchase vehicles throughout Europe,” mentioned Alex Chesterman OBE, Cazoo’s founder and CEO in an announcement. “We’ve got created probably the most complete and absolutely built-in providing within the largest retail sector which at the moment has very low digital penetration. This deal will present us with nearly $1 billion of additional funds to gas our development and I’m delighted to be partnering with Dan and his workforce at AJAX to quickly develop and ship the perfect automobile shopping for expertise to shoppers throughout Europe.”
Chesterman — who already had a excessive profile earlier than founding Cazoo (he had additionally based LoveFilm, acquired by Amazon and used as step one in its transfer into constructing its Netflix competitor, Amazon Prime Video; and the property gross sales website Zoopla) — will stay CEO of the corporate.
Extra to return.