The directors of Cazoo, the British online car retailer once valued at more than £5 billion, are closing in on a deal to divest its marketplace division.
Sky News has learned that Motors.co.uk, a privately owned used car platform, is now the frontrunner in purchasing Cazoo’s brand and marketplace business.
Industry sources said the price would likely represent a significant discount to the investment Cazoo has put into sports sponsorship deals in a bid to increase brand awareness since the company’s launch in 2018.
Cazoo entered administration last month, having failed to put itself in a sustainable position following a debt restructuring last year.
Teneo, which handles administration, sold several Cazoo operations, with hundreds of employees losing their jobs as a result of administration.
Its wholesale arm was sold to G3, another industry player, with Constellation Automotive, owner of Cazoo rival Cinch, also having acquired a number of assets from the New York-listed company.
Cazoo was founded by Alex Chesterman, the successful entrepreneur behind Zoopla, the real estate portal.
It raised several tranches of financing at increasingly higher valuations before debuting on the stock market in 2021, when investors gave it a valuation of $8 billion.
Cazoo has spent tens of millions of pounds on sponsorship deals in football, snooker and darts in an attempt to gain market share.
An industry source recently said that Cazoo’s move to a platform model has seen its inventory increase to more than 15,000 cars.
It is now the only online vehicle marketplace where consumers can buy and sell cars under a single brand.
Chesterman left the company several months ago following a balance sheet restructuring that resulted in the conversion of hundreds of millions of dollars in debt into equity.
Cazoo said last month: “Our new marketplace model, where consumers can buy and sell cars, is generating revenue and performing above expectations, with interest from nearly 100 car dealers, including many well-known names looking to trade in Cazoo platform”.
The company added that it had “successfully restructured and significantly reduced the group’s cash burn.”
Neither Motors.co.uk nor Teneo could be reached for comment.
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