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London’s Cazoo raises $1.6B, takes $7B SPAC deal by Dan Och to list NYSE

Cazoo

British unicorn Cazoo that makes buying and selling cars online as easy as other products is all set to make its stock market debut in New York. The company will float at $7 billion (nearly £5 billion) and has agreed to go public in New York through a merger with AJAX I Acquisition Corp, a blank-check acquisition company led by billionaire US investor Dan Och.

To be listed in NYSE in Q3

The combined company will be called Cazoo, provided the deal will meet the approval of AJAX and Cazoo shareholders. It will be listed on the New York Stock Exchange sometime in the third quarter of 2021.

As the special-purpose acquisition company Ajax I will raise around $1.6 billion in proceeds for the company, including $805 million in a cash trust from the SPAC and another $800 million from Ajax’s sponsors, Cazoo said in a statement on Monday. London-based Cazoo will be listed in New York after the deal closes, and Och plans to join the company’s board.

Further, the transaction was led by the AJAX sponsors and D1 Capital Partners and joined by new and existing investors including Altimeter, funds & accounts managed by BlackRock, Counterpoint Global (Morgan Stanley) and Fidelity Management and Research Company LLC, Marcho Partners, Mubadala Capital, Pelham Capital, Senator Investment Group and Spruce House Partnership.

Alex Chesterman OBE, Founder & CEO of Cazoo, commented: “This announcement is another major milestone in our continued drive to transform the way people buy cars across Europe. We have created the most comprehensive and fully integrated offering in the largest retail sector which currently has very low digital penetration. This deal will provide us with almost $1 billion of further funds to fuel our growth and I am delighted to be partnering with Dan and his team at AJAX to rapidly expand and deliver the best car buying experience to consumers across Europe.”

Martin Davis, CEO at Draper Esprit, commented: “Cazoo are tapping into a huge potential market and we’ve witnessed their breath-taking growth over the last 12 months. Merging with AJAX I will provide Cazoo with the capability to fuel their growth, both organic and through acquisition. We look forward to Alex and his highly experienced team taking this next step onto the public markets.”

How will it help Cazoo?

Established in 2018 by Alex Chesterman, Cazoo is pioneering the shift to online car buying in Europe. The company has delivered over 20,000 cars to consumers across the UK. It assures them transparency and convenience of buying quality used cars directly from their home.

Alex Chesterman is the founder of the UK-based property website Zoopla and the pan-European movie rental and streaming service, LoveFilm, which was sold to Amazon for £200M and he will continue to remain CEO of Cazoo.

Recently, Cazoo acquired German car subscription platform Cluno and UK’s leading car subscription business Drover. With these, the company is a leading car subscription player in Europe with over 6,000 subscribers across the UK, Germany and France.

This transaction will support Cazoo’s mission, which is to continue to transform the car buying experience across Europe. The proceeds will fund the further building of its brand and infrastructure It said in the company press release, that the company saw sales grow by over 300% and is on track for 2021 revenues to approach $1 billion, with annual run rate revenues of $600 million in the first quarter with a business model based mostly around used-car sales but also diversifying, for example with a car subscription service, brand & vertical infrastructure and more. Cazoo is well positioned to take advantage of the shift to online car buying and disrupt the huge and highly fragmented European car buying market.