Cazoo – the “Amazon of used cars” – comes to market
British online car retailer Cazoo will make its stockmarket debut in New York after a $7bn merger with a SPAC.


British online car retailer Cazoo will make its stockmarket debut in New York after it agreed to merge with special-purpose acquisition company (SPAC) Ajax I in a deal that values the company at $7bn, says Kalyeena Makortoff in The Guardian. The deal is a “blow” to the City and the London Stock Exchange, which reportedly “lobbied for the car retailer to list in its home market”. This also represents another victory for SPACs, which offer a “cheaper, quicker way for a private company to join a stockmarket”.
The agreement will provide Cazoo, known as the “Amazon of used cars” with up to $1.6bn in funding, to “fuel its growth and expand its operations across Europe”. The deal is particularly good news for the Daily Mail and General Trust, says The Times. Its 20% stake in the company is worth around £1bn – “significantly more” than the £117m the Daily Mail originally invested. No wonder Daily Mail shares jumped by 9% on the news. The listing is expected to conclude by the third quarter of this year, but by then it could seem a bargain, says Tim Bradshaw in the Financial Times. Cazoo believes that Europe’s $500bn used car market is “ripe for disruption”, with customers becoming “more comfortable spending sums as [high] as its average selling price of £12,453 online”.
Meanwhile, the greater population density compared with America could enable it to make earnings before interest, taxes, depreciation and amortisation margins of 8%-10% in the long term. Note that SoftBank-backed rival Auto1 is already a third above its initial public offering price after it went public in Frankfurt in early February to raise around €1.8bn.
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Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.
He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.
Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.
As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.
Follow Matthew on Twitter: @DrMatthewPartri
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