The online car dealer Cazoo which was once valued at $8bn (£6.3bn) has collapsed into administration, putting 200 jobs at risk.
Administrators at Teneo have been appointed to the business, which was founded by Alex Chesterman, the serial entrepreneur who also launched property site Zoopla and Netflix forerunner LoveFilm.
Teneo is now on the hunt for a buyer for Cazoo’s remaining assets, including its online marketplace.
“Following our appointment, we continue to progress discussions with a number of interested parties on the marketplace business and remaining customer collections centres”, one of Teneo’s administrators, Matt Mawhinney, said in a statement.
“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 coming weeks.”
The company’s collapse comes just two years after the UK-based used-car website listed on the New York Stock Exchange to much fanfare in 2021. It spent a hefty sum sponsoring football clubs including Aston Villa and Everton, as well as horse racing, darts, snooker and cricket to bolster its brand.
While it has sold 160,000 vehicles since its launch in 2018, an inflation-induced squeeze on consumer spending put further pressure on the firm’s finances, forcing it to abandon its EU business and resulting in more than 700 job cuts, and losses of £700m, in 2022.
In early 2023, founder Chesterman stepped down as chief executive to become the company’s chair, before resigning from the firm in December.
By March this year, Cazoo announced further restructuring, including the sale of a car repair centre in Bedfordshire, England, and customer collection centres in Birmingham and Bristol, to focus solely on its online buy-and-sell platform. The move resulted in a further 720 job losses.
While bosses managed to repay loans and slim down the business, they said the company was still short of the capital needed to sustain the business in the long term. The board said in a US filing that it was “in the best interests of the company and its stakeholders to commence the winding up of the company”.
Cazoo’s remaining 200 employees are now at risk, including 124 who work for the marketplace division in London, and 25 at the group’s customer collection centres in Manchester and Northampton. Their jobs will depend on whether administrators can find a buyer, and whether the new owners were willing to employ them.
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A further 59 employees – most of which are from the head office and customer service centres in London and Southampton – will be helping Teneo wind down the business, until they are no longer needed.
Cazoo is now planning to hold an extraordinary meeting with shareholders on 6 June to approve the winding-up.
Chesterman declined to comment.