UK-Based Used Car Retailer Cazoo Nearing Administration in a Spectacular Fall from Grace

Struggling online used car retailer Cazoo is on the brink of entering administration, jeopardizing approximately 1,000 jobs within the company in a remarkable downfall. Founded in 2018 by entrepreneurial figure Alex Chesterman, known for creating Zoopla and LoveFilm, Cazoo initially thrived during the pandemic era due to the surge in online car purchases.

The company’s decision to list its shares on the New York Stock Exchange in 2021 propelled its valuation to $7 billion, but that figure has plummeted to a mere $30 million, marking a significant reversal of fortune. The impending administration stems from Cazoo’s inability to secure funding from investors and its failure to meet the deadline for submitting annual accounts.

In a strategic shift, Cazoo divested its remaining stock in March and transitioned to an online marketplace model, allowing external car dealers to list their inventory on its platform. Concurrently, the company phased out its operations in Europe amid financial struggles.

Despite its soaring valuation in 2021, Cazoo has historically operated at a loss and failed to achieve profitability. In 2022, its losses ballooned to £700 million from the £544 million reported the previous year, with 120,000 cars sold in the UK by December. The company explored various options, including selling segments of its business, but has yet to find a buyer.

The workforce at Cazoo has experienced a significant reduction, dwindling from 4,500 employees in 2021 to roughly 1,000 presently. Leadership changes within the company have also occurred, with Chesterman stepping down as CEO in January 2023 to assume the role of chairman, before departing entirely in December. Subsequently, Paul Whitehead, appointed as the new CEO, also resigned in March.