Online car retailer Cazoo has attracted a new group of investors in a new funding round which has taken its overall financial backing to a record £450 million.
The business, officially launched in December last year by Zoopla and LoveFiLM co-founder Alex Chesterman attracted an additional £240m with its latest funding round.
Goldman Sachs International and Numis acted as joint placement agents to Cazoo on the fundraising which was said to be “significantly over-subscribed” and has saw Cazoo’s valuation more than double since its last funding round earlier this year when it became the fastest UK business ever to achieve “unicorn” status with a valuation of $1bn.
Led by General Catalyst, Cazoo’s latest backers also include D1 Capital Partners and funds managed by Fidelity Management & Research Company and Blackrock alongside other new and existing investors including L Catterton, Durable Capital Partners, The Spruce House Partnership, Novator, Mubadala Capital and dmg ventures, amongst others.
Yesterday (September 30) AM reported that Cazoo had opened the fifth of its physical Customer Centre locations, many of which will be created from former Imperial Cars facilities following its July acquisition of the independent used car supermarket group.
Its latest site is in Birmingham and joins a network that now includes Manchester, London, Bristol and Cardiff and is expected to grow to 16 sites by the end of 2020.
Cazoo said in a statement issued today that consumers have rapidly embraced the transparency and convenience of its online car buying and home delivery model, resulting in revenues of over £100m since its launch.
In an interview with AM last month Chesterman said that his adoption of physical car handover and aftersales sites did not constitute a “u-turn” in what had initially appeared to be a wholly online operation.
Today he suggested that the success of the businesses latest funding round only reinforced the business’s belief that it has the correct model, and funding firepower, to claim a viable share of the UK’s used car retail sector.
“Over the past few months we have seen an acceleration in the shift from offline to online car buying as UK consumers have continued to embrace our unique and market-leading proposition,” he said.
“This latest funding demonstrates the conviction of some of the world’s best investors in both our business model and team as well as the UK market and gives Cazoo the firepower to deliver on our plans to provide the best possible car buying experience for UK consumers.”
Commenting on Cazoo’s latest fundraising round, Adam Valkin, the managing director of investor General Catalyst, said: “I have known Alex for seventeen years since our days building LoveFilm. He has made a career out of identifying large consumer markets where technology can drive change and then leading that transformation by focusing on the customer and delivering value, convenience and a trusted service.
“With Cazoo, Alex is taking his proven playbook to perhaps his largest opportunity yet for the benefit of used car buyers across the UK.”
Dan Sundheim, the founder of D1 Capital, said: “We’re excited to partner with Alex and the team at Cazoo. They have generated enormous value for customers and shareholders in their previous internet ventures and we are confident that Cazoo will greatly accelerate the digital transformation of the used car industry and dramatically improve the car buying experience for consumers in the UK.”