Once-promising tech company Cazoo falls into administration | Business Update

Cazoo, the once highly valued British online car retailer, is set to crash into administration on Tuesday, according to Sky News. The company, which was valued at well over £5bn, will see insolvency practitioners from Teneo formally appointed following a recent filing for temporary protection from creditors.

The crisis at Cazoo has already resulted in over 700 job losses, with administrators expected to retain some staff to operate the remaining marketplace model while exploring a potential sale. Industry sources suggest that the move into administration will allow Teneo to focus on finding a buyer, as the marketplace model has attracted interest from various parties.

In recent developments, Cazoo’s wholesale arm was sold to G3, while Constellation Automotive, the owner of Cazoo’s rival Cinch, acquired assets from the struggling company. Potential buyers for Cazoo’s marketplace, including its brand, reportedly include BMW, Motorpoint, Car Gurus, and Motors.co.uk.

Founded in 2018 by entrepreneur Alex Chesterman, Cazoo raised significant funding and made its stock exchange debut in 2021 with a valuation of $8bn. The company invested heavily in sponsorship deals and pivoted to a platform model, amassing a large inventory of over 15,000 cars.

The entry into administration follows a balance sheet restructuring and operations overhaul, with Cazoo stating that its new marketplace model is generating revenue and attracting interest from car dealers. Despite the challenging circumstances, the company remains optimistic about its future prospects.