Cazoo is pivoting to become a pure marketplace for used car sales in the style of Auto Trader.
The UK-founded firm is also planning to de-list from the New York Stock Exchange while its CEO Paul Whitehead, who held the position of COO at inception in 2019, is to step down at the end of the month.
It follows a dramatic fall from grace for the former unicorn which offered end-to-end used car sales – including refurbishment – entirely online. Cazoo saw incredible growth due to the COVID-19 pandemic and quickly launched into several international markets, but has suffered big losses since consumers returned to car showrooms.
Founder Alex Chesterman – co-founder of LoveFilm and Zoopla – left the business in December 2023 as it restructured its debt pile. Chesterman was succeeded as CEO by Whitehead in April last year following a turbulent few months which saw its share price nosedive, the disposal of its Italian and Spanish businesses and its French and German operations wound down.
Whitehead will remain with the business as a strategic adviser until mid-May at least. The company, which put in place a board which included restructuring specialists in December, is also set to reduce headcount.
“Since their appointment [in December], the members of the Cazoo board have reviewed the strategic options for the company and believe that a pivot to a pure-play marketplace business model is the best direction for Cazoo and all its stakeholders,” a statement read.
Cazoo has sold close to 160,000 retail cars – entirely online – since 2019 but will now wind down its inventory through retail and wholesale channels.
It plans to leverage its customer and data resources, including the 185,000 valuations it provides every month to consumers looking to sell their car.
“Transitioning Cazoo to a pure-play automotive marketplace business model leverages our key advantages: the nationally recognised and trusted Cazoo brand and the Cazoo eCommerce technology platform,” said Whitehead.
“We have built a data-driven business for buying and selling cars and having sold close to 160,000 cars we have demonstrated that there is robust demand for online transactions in the automotive market.
“Our transition means we can now offer the UK’s 13,000 car dealers the chance to put their forecourt stock in front of the one million potential customers on average who visit the Cazoo website every month. The UK used car market represents a significant opportunity for Cazoo, with approximately seven million transactions annually, worth an estimated £100 billion.
“We look forward to completing this transition and starting an exciting new chapter for Cazoo, building upon our investment in both the Cazoo brand and in our eCommerce technology platform.”
The board said it would “continue to review strategic initiatives and focus on satisfying Cazoo’s liquidity needs”.
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