London-based used car startup Cazoo is going public in the U.S. via a $7 billion SPAC deal
Another day, another SPAC deal. Last October, we wrote about Cazoo, one of the UK’s fastest-growing technology startups that makes buying a used car as simple and seamless as buying any other product online. At the time, the 3-year old startup raised $311 million in funding to accelerate growth. Now Cazoo is ready to go public.
Today, Cazoo announced it’s going public through a merger with AJAX I, a U.S. blank-check firm founded by billionaire investor Daniel Och’s special purpose acquisition company, in a deal valuing the business at $7 billion. As part of the deal, Cazoo founder Alex Chesterman will stay on as Cazoo’s CEO following the deal, while AJAX I’s Daniel Och is joining the startup’s board of directors.
A blank-check company sometimes called a special purpose acquisition company (SPAC), is a shell company that has no operations but plans to go public with the intention of acquiring or merging with a company utilizing the proceeds of the SPAC’s initial public offering (IPO).
The startup is expected to raise $1.6 billion, including $805 million in a cash trust from the SPAC and a further $800 million from private investors. “This announcement is another major milestone in our continued drive to transform the way people buy cars across Europe,” Chesterman said in a statement Monday. “We have created the most comprehensive and fully integrated offering in the largest retail sector which currently has very low digital penetration.”
Founded in 2018 by Alex Chesterman, Cazoo is a developer of an online used car marketplace designed to transform the way people buy, finance, or rent used cars. Cazoo’s platform enables customers to purchase a used car online and have it delivered to their door and provides a free 90-day warranty and roadside assistance, enabling the customers to embrace the simplicity of the online convenience, free delivery, and 7-day money-back guarantee. Alex Chesterman’s previous industry-changing ventures include both Zoopla and LoveFilm. Cazoo’s competitors include Auto Trader, Carvana, among others.