Cazoo Holdings Limited (“Cazoo” or “the Company”), the UK’s leading online car retailer with a fast-growing presence in Europe, which makes buying a car as simple and seamless as purchasing any other product online, and AJAX I (“AJAX”) (NYSE: AJAX), a publicly-traded special purpose acquisition company (“SPAC”), today announced the signing of a definitive business combination agreement.
AJAX is a $805m SPAC, founded by renowned US investor Dan Och in partnership with Glenn Fuhrman and a team of strategic advisors including the founders of Chipotle, Instagram, Square and 23andMe. Upon closing of the transaction, the combined company will be named Cazoo and will be listed on the New York Stock Exchange under the new ticker symbol “CZOO”.
Cazoo is pioneering the shift to online car buying in Europe and since being founded in 2018, has delivered over 20,000 cars to consumers across the UK who have embraced the selection, transparency and convenience of buying quality used cars entirely online. Following its recent acquisitions, Cazoo is also now Europe’s leading car subscription player with over 6,000 subscribers across the UK, Germany and France.
Cazoo has developed a market leading platform and brand with a fully integrated model where it owns and reconditions all its cars before offering them for sale on its website for either delivery or collection in as little as 72 hours. Already the leading online car retailer in the UK, Cazoo has begun its international expansion as it seeks to digitally disrupt the $700bn European used car market which remains overwhelmingly offline.
As one of Europe’s fastest-growing businesses, Cazoo expects to achieve revenues approaching $1bn in 2021, a growth rate of more than 300% in its second full year of operations and has already built a team of over 1,800 across the UK, Germany, France and Portugal. The company will continue to be led by its Founder & CEO, Alex Chesterman OBE, along with its world class management team. AJAX’s founder, Dan Och, will join the combined company’s Board of Directors.
This transaction will support Cazoo’s mission to continue to transform the car buying experience across Europe, with the proceeds funding the further build out of its brand and infrastructure. With its best-in-class and unique consumer proposition and fully integrated model, Cazoo is well positioned to take advantage of the shift to online car buying and disrupt the huge and highly fragmented European car buying market.
Alex Chesterman OBE, Founder & CEO of Cazoo, commented, “This announcement is another major milestone in our continued drive to transform the way people buy cars across Europe. We have created the most comprehensive and fully integrated offering in the largest retail sector which currently has very low digital penetration. This deal will provide us with almost $1 billion of further funds to fuel our growth and I am delighted to be partnering with Dan and his team at AJAX to rapidly expand and deliver the best car buying experience to consumers across Europe.”
Dan Och, Founder of AJAX said, “We are incredibly excited to have the opportunity to partner with Alex and the exceptional team at Cazoo. Alex has proven to be one of Europe’s most successful serial entrepreneurs and we are proud to be supporting the growth of this world-class team, brand and platform. With their constant focus on innovation, data and customer satisfaction, I have no doubt that Cazoo is going to continue to lead the way in this massive, untapped market opportunity and am looking forward to joining the Board of Cazoo and working with Alex and his team.”
Daniel Sundheim, Founder & CIO of D1 Capital Partners said, “As a long-term investor in Cazoo and believer in its leadership team, we are pleased to continue supporting Cazoo’s growth as a public company. While Cazoo had many options for funding its strategy, its decision to merge with AJAX and join with Dan Och and other renowned partners was a good one that will have positive implications for the company and its future.”
Cazoo Investment Highlights
- Significant $700bn TAM opportunity: UK & European highly fragmented used car markets are ripe for digital disruption with no dealer group having more than 5% market share
- Hypergrowth: over 20,000 cars already delivered in UK with annual run-rate revenues exceeding $600m in the first quarter of 2021. Cazoo expects revenues approaching $1 billion in 2021, growing 300%+ YoY with positive and scaling unit economics and multi-year high growth rate ahead
- Efficient model with clear growth drivers: increasing online buying adoption, multiple ancillary revenue opportunities, subscription service, new cars and market share gains in UK and Europe
- Market-leading proposition and execution: fully integrated model with in-house reconditioning & logistics, leveraging proprietary data and technology to underpin growth and profitability
- World-class team: unrivalled track record, led by Alex Chesterman OBE, one of Europe’s most successful serial founders and digital entrepreneurs
- M&A expertise: significant experience and background in executing game-changing M&A deals and strategic partnerships