Car search platform takes the keys to Cazoo

Motors, a privately-owned used car search platform, has today announced it has bought Cazoo, the used car unicorn that went into administration in May, for an undisclosed sum.

Cazoo, founded by Zoopla entrepreneur Alex Chesterman, immediately made a name for itself when it launched in 2018. It became the fastest UK company to achieve unicorn status, and featured twice in our list of the top 100 UK startups.

But after various financial challenges, and a difficult industry landscape, the brand went bust last month, and was forced to lay off hundreds of staff members.

In May, Cazoo said in a statement that it had been struggling to find a buyer. Motors has now confirmed it has acquired Cazoo, and plans to turn the brand into a mobile-first marketplace.

What is Motors?

CarDealer first reported in early May that Motors was in talks to acquire the Cazoo brand, which was previously valued at over £5m, for a cut-price deal.

Motors is an online platform for used cars. It began as a consumer website, Motors.co.uk, and was bought by private equity firms 03 Industries and Novum Capital in 2021.

In November 2023, Motors.co.uk rebranded as Motors. Today, it provides car dealers with access to multisite advertising for used cars. All of this is powered by a joined-up site network, featuring partners eBay and Gumtree, and, soon, Cazoo.

Motors Chief Executive Barry Judge told CarDealer magazine, “This acquisition offers an exciting opportunity for dealers to tap into Cazoo’s awareness and traffic as part of the Motors network.

“All dealer partners that are live on our Motors MultiSite packages will automatically benefit from exposure on Cazoo, free of charge.”

Cazoo goes mobile

One major cause for Cazoo’s financial troubles was the expenses it incurred by its offline operations. Cazoo had purchased expensive leaseholds for its 10 ‘customer care centres’, located across the UK, including a major £1 million showroom in Wembley, central London.

Earlier this year, Cazoo announced plans to lease the sites and transition to a marketplace business model in an effort to cut down overheads.

According to CarDealer, Motors will lean into the strategy by launching a new Cazoo app in the next few weeks. It will then launch a new website with over 250,000 used car listings.

New road for Cazoo

The sale marks the end in a series of collisions for Cazoo. Following a loss of £704m in 2022, and a significant £544m deficit in 2021, the startup halted sales at the start of this year and began to sell off its inventory to reduce cash burn.

Investors did not respond well to the action. In April, Paul Whitehead, who had taken over after Chesterman’s exit last January, stepped down from his role as CEO.

One month later, Cazoo warned investors it could go bust if it failed to urgently raise capital. This worst-case scenario eventually became reality.

Last week, Cazoo Group revealed that the board had voted unanimously to wind up the company and appoint voluntary liquidators.

Judge is now optimistic that Motors can turn things around. He said, “Despite its challenges as a business, Cazoo has undoubtedly become a household name with car buyers.

“We have the expertise and inventory to immediately establish the new Cazoo site as a modern marketplace for used cars.”