Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

Cazoo Collapses After $8 Billion Valuation Debacle

by May 22, 2024
May 22, 2024
Cazoo Collapses After $8 Billion Valuation Debacle

Cazoo has entered administration, a mere three years after its ambitious $8 billion flotation in New York.

The used car enterprise, launched by Zoopla’s founder Alex Chesterman, had been seeking protection from creditors earlier this month and cautioned shareholders about the impending need to file for administration. Restructuring advisers from Teneo have now been appointed to manage the insolvency.

Founded by Chesterman after his successes with Zoopla and LoveFilm, Cazoo started as an online retailer and supplier of used cars. Recently, however, it shifted to an advertising marketplace model akin to Auto Trader. This pivot came too late to save the business from its financial woes.

Since its inception in 2018, Cazoo expanded swiftly, pouring substantial investment into marketing, including high-profile sponsorships of cricket, rugby, snooker, and golf. Despite this aggressive growth strategy, the company consistently failed to turn a profit, reporting pre-tax losses of £531.5 million in 2021 and £525.5 million in 2022. These financial struggles necessitated significant job cuts and a retreat from operations in Germany, France, and Italy.

Recently, Cazoo sold off its wholesale division, vehicle repair centre, and customer collection centres, which bolstered its cash reserves to over £98 million as of May 13. Nonetheless, the shift to an advertising model resulted in 728 job losses.

In the announcement of Cazoo’s administration, Teneo revealed that nearly 100 car dealers had shown interest in trading on its marketing platform. Teneo plans to continue marketing Cazoo’s marketplace business, aiming to secure a sale in the coming weeks. Currently, Cazoo retains about 200 employees.

Matt Mawhinney, joint administrator at Teneo, stated, “Following Cazoo’s decision to pivot to a marketplace model, the group has been winding down its legacy operations and sold a substantial number of its businesses and assets. These sales have generated additional value for creditors, preserved a significant number of jobs, and ensured that leases have been transferred to new operators to mitigate losses to landlords.”

Chesterman’s stake in Cazoo was significantly diminished last year when the company undertook a debt-for-equity swap involving $630 million in bonds, ceding majority control to Viking Global Investors, a US hedge fund.

Cazoo’s downfall occurs amidst a trend of London Stock Exchange-listed companies seeking US listings for better valuations. Critics argue that investors in the City of London are overly cautious and fail to support entrepreneurial ventures. Tom Blomfield, former CEO of Monzo, noted last year that the UK was “not always favourable to ambitious founders who want to do something unusual,” leading him to relocate to San Francisco to invest in early-stage tech companies.

However, forecasts from UBS and HSBC suggest optimism for UK equities this year. UBS anticipates that a global manufacturing sector revival will benefit the London market due to its energy and commodities exposure. HSBC points out that UK pension funds have ceased selling UK stocks after withdrawing nearly £2 trillion from the market over the past three decades.

Read more:
Cazoo Collapses After $8 Billion Valuation Debacle

0
FacebookTwitterGoogle +Pinterest
previous post
KERB Hospitality Group Unveils 2024 Impact Report, Showcasing Success in Supporting Food Entrepreneurs
next post
UK Inflation Drops to 2.3%: Prompting Potential August Interest Rate Cut

You may also like

Rainfall washes out retail sales in March

April 21, 2023

A Guide to Slot Game Development

July 22, 2024

Bank of England, Home Office, MI5 and News...

October 31, 2022

Oxford University spinout Lumai secures £1.1m Innovate UK...

February 16, 2023

How can expense management software streamline your business’s...

January 11, 2023

Getting to Know You: Daniel Mackle, Founder of...

May 31, 2023

Pursue the Best Trading Partnership and Enjoy the...

February 28, 2023

John Lewis suffers first half loss of £99m...

September 15, 2022

Russia fines Google $20 Decillion – more than...

October 30, 2024

Boris Johnson and Rishi Sunak favourites as leadership...

October 21, 2022

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Britain’s fastest-growing firms revealed for 2025: Dfyne, Nala’s Baby and Hawkstone lead the charge

      June 29, 2025
    • Schumer to force Senate reading of Trump’s entire ‘big, beautiful bill’

      June 28, 2025
    • Rubio condemns Iran’s ‘unacceptable’ threats against IAEA director

      June 28, 2025
    • Key blue state Republican says Senate’s local tax write-off offer is a ‘good deal’

      June 28, 2025
    • Key GOP senator defects on crucial vote, imperiling Trump’s ‘big, beautiful bill’ in narrow majority

      June 28, 2025
    • Terror in Gaza: Hamas offers bounties to kill US and local aid workers, group says

      June 28, 2025

    Categories

    • Business (8,330)
    • Investing (2,081)
    • Politics (15,851)
    • Stocks (3,177)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved