Online car seller Cazoo has gone into administration, three years after it listed on the New York Stock Exchange with a valuation of £5bn ($6.3bn).
The company, launched in 2018 by Zoopla founder and serial entrepreneur Alex Chesterman, has cut 728 jobs since the start of March after launching dramatic cost-cutting efforts to stay afloat.
However, it has now appointed administrators from Teneo, who will seek to sell off Cazoo’s remaining marketplace business.
After the company’s launch, it grew rapidly but significant losses were reported in recent years as it invested heavily in marketing and sponsorships, such as sponsor deals with Aston Villa and Everton football clubs.
Last year, Cazoo cut hundreds of jobs and axed its used car markets in the European Union in a bid to improve its finances.
In March, the company launched its dramatic restructuring. It has since sold its entire vehicle inventory and transitioned into a pure marketplace platform similar to Auto Trader, for people looking to buy and sell cars.
The process saw it sell several repair and customer collection centres to Constellation Group, the rival firm behind Cinch and WeBuyAnyCar.
It also sold its wholesale business and assets to rival G3 earlier this week.
Matt Mawhinney, joint administrator at Teneo, said: “Following our appointment, we continue to progress discussions with a number of interested parties on the marketplace business and remaining customer collections centres.
“The marketplace model is performing ahead of expectations, with strong dealer sign-up, and the administration appointment provides us with an opportunity to secure a sale of the business over the course of the coming weeks.”
Teneo said the asset sales have generated additional value for creditors and “preserved a significant number of jobs”.
The company was founded in the UK but listed in New York in 2021 – in a move deemed a blow for London at the time – with a valuation of around £5bn.
Cazoo Group, the US-listed parent company of Cazoo Ltd, has started a voluntary liquidation process.
Teneo said it would retain the firm’s 208 remaining staff for the time being during the administration process.
These include the 124 largely London-based employees linked to its marketplace business and 25 employees at its Manchester and Northampton customer collection centres, with administrators hopeful that many of these can be transferred as part of a successful sale.
The insolvency experts will retain 59 employees, largely based at Cazoo’s head office and customer service centres in London and Southampton, who will be assisting with the winding-down process.
