Cazoo has entered administration after the once-prominent British tech unicorn succumbed to insolvency, jeopardizing over 200 jobs.
Founded by ex-Zoopla head Alex Chesterman, the online used car retailer confirmed on Tuesday that Teneo had been appointed as administrator. This follows Cazoo’s move less than two weeks earlier to file a notice for administration, which temporarily shielded it from creditors.
This downturn represents a stark reversal for Cazoo, which had been celebrated as a standout in the British tech landscape and reached a valuation exceeding $8 billion (£6.3 billion) after its 2021 IPO on the New York Stock Exchange.
The company, which reported significant losses, faced challenges from rising interest rates and increased competition as rivals adopted its online sales approach. Additionally, a decline in used car values and waning interest in electric vehicles have further strained the business.
In March, Cazoo shifted from owning all its used car inventory to adopting a marketplace model similar to Autotrader. Mr. Chesterman resigned as CEO last year but continued in the role of executive chairman.
Matt Mawhinney, joint administrator at Teneo, noted that Cazoo’s new marketplace model was performing better than expected. Despite this, it has not been sufficient to keep the company afloat.
Teneo is now looking to find a buyer for Cazoo in hopes of preserving its 200 jobs. The company has garnered interest from potential buyers including the German automotive giant BMW, along with industry peers such as Motorpoint, Car Gurus, and Motors.co.uk, according to a report by Sky News.
Earlier this week, Cazoo’s wholesale division was acquired by industry competitor G3, and other assets, including its vehicle fleet, were purchased by Constellation Automotive, the parent company of Cinch.
