Online Car Sales Platform Cazoo Set To Go Public In $8.1 Billion SPAC

online car sales

The pandemic has fueled a surge in online sales of vehicles. Cazoo Holdings, a U.K. online seller of used cars, has ridden that digital shift — and is now heading toward going public in a deal reportedly worth $7 billion to $8 billion.

Cazoo is set to merge with a blank-check company, AJAX I, a New York-listed special-purpose acquisition company (SPAC) led by U.S. billionaire investor Dan Och, The Wall Street Journal reported. A SPAC is a shell company that raises cash by going public — and then goes shopping for an existing company or companies.

Last October, Cazoo raised $310 million. The company purchases and refurnishes vehicles prior to marketing them on the internet. That funding increased the total investment raised for the used-car platform to about $580 million, at the time.

Other online car-sales platforms include Carvana and CarMax. In general, the auto industry’s sales crashed as the pandemic hit. Since then, sales have picked up speed and, in terms of percentages in particular, have picked up in the online category.

Cazoo started selling used cars in December 2019. The company was started in 2018 by British entrepreneur Alex Chesterman.

The digital shift has meant that U.S. automakers have expanded their delivery programs. For their part, dealers have upgraded their websites so customers can tour their showrooms without actually going there. This means shoppers can carry out more of the car-buying process online, the WSJ reported.

Cazoo’s platform only sells used cars, which the company buys from leasing companies or its own customers. About a third of Cazoo’s sales involve a customer trading in their car with the company.

Customers can pick out a car on the Cazoo website. Then, they can then pick the car up at one of 17 collection points across the U.K., or have the company deliver it within 72 hours.

What about returns? Customers can do that within seven days if they are not satisfied.