Investments

UK's Used Car Startup Cazoo Raises Another $116 Million

Giveaway Lets People Trade Stuff For eCurrency

Used car sales startup Cazoo has raised another 100 million pounds ($116 million), which it wants to use to continue buttressing its business, according to a report by TechCrunch.

The funding round was led by DMG Ventures and featured participation from General Catalyst, CNP (Groupe Frère), Mubadala Capital, Octopus Ventures, Eight Roads Ventures and Stride.VC.

That brings the total raised by Cazoo up to 180 million pounds ($209.8 million) since the company was founded just a year and a half ago by Alex Chesterman, previously known for starting film rental service LoveFilm and property sales and rental website Zoopla.

A company spokesman told PYMNTS that Cazoo had a $300 million valuation as of September, and that the latest funding round "was at a significant uplift to that."

Cazoo's mission statement involves buying up used cars, selling them online and delivering them to customers' doorsteps. Cazoo has already sold thousands of cars and has delivered all over the U.K., TechCrunch reported. The business racked up 20 million pounds ($23.3 million) in sales during its first three months.

The vehicles sold by Cazoo are fully reconditioned before sales are made and come with a weeklong money-back guarantee, a free 90-day warranty and roadside assistance, according to the company website. Buyers can purchase or finance Cazoo vehicles using the internet and can search for part exchanges if needed.

Although it may seem like an odd choice for Cazoo's car-based operation to keep running so robustly in times when people are encouraged to stay home and avoid traveling due to the coronavirus, Cazoo assured customers that the last phase of a sale, where the vehicle is handed off, is always done at a safe distance, TechCrunch reported.

The success of Cazoo is something of an anomaly in these times as many companies are staring down the barrel of revenue shortfalls due to the virus. Initial public offerings (IPOs) were already seeing a slowdown prior to the pandemic due to several under-performing entries last fall and winter.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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