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According to the report, the deal values Cazoo around $7 billion with an extra $1.6 billion of which $805 million will come from Ajax I and another $800 million will be received from several other stakeholders.
Cazoo Holdings Limited, a UK company that buys and restores used cars and delivers them to buyers, is on the verge of going public on the NYSE through a business merger with Ajax I Acquisition Corp, a blank-check acquisition company.
According to the report, the deal values Cazoo around $7 billion with an extra $1.6 billion of which $805 million will come from Ajax I and another $800 million PIPE from several stakeholders. These include D1 Capital Partners, the backers of Cazoo, and sponsors of Ajax I. Also, BlackRock, Counterpoint Global, Morgan Stanley, Fidelity, Altimeter Growth Corp, and many other previous and new investors will be on the contributing list with the boards of Cazoo and Ajax I approving the deal.
Alex Chesterman, the founder of Cazoo, according to reports, will remain the Chief Executive Officer of the company.
The company has paid a lot of attention to the expansion of their car sales portal and other business departments like the Car Subscription Services across Germany, France, and the UK. This service currently has over 6000 subscribers. This deal according to Chesterman will be an important boost to their plan to bring massive transformation to how cars are bought in Europe. After expressing his excitement in partnering with Ajax I to deliver and expand the car buying experience in the best way, he disclosed that the deal will provide them with close to $1 billion to take their growth to a new height.
Cazoo has had an impressive run recently with their car sales expected to record an unprecedented growth of 300% by the end of the year. The 2021 revenue is expected to reach $1 billion and $600 million in the first quarter as the annual run-rate revenue. Their impressive run is linked to the Covid-19 that prevented traditional dealerships from operating and companies like Cazoo tapping into the consumer base.
Dan Och, the founder of Ajax I and a hedge fund tycoon in a statement said that he believes Cazoo will lead the way to make the best out of this untapped market opportunity as they have over the years prioritized innovation, data, and customer satisfaction. He explained that the European used car market is valued at around $600 billion with only 1% to 2% digital penetration. This means there is a lot of opportunities to explore this market.
The founder of D1 Capital Partners Daniel Sundheim stated that the decision of Cazoo to join hands with Ajax and other partners when they had other options will have long-term positive implications for the company.
As of October 2020, Cazoo was valued at $2 billion after completing fundraising. Their market boom puts them in a good position to double annually to reach $8 billion by 2024.
The recent Special Purpose Acquisition Company (SPAC) deal means the UK has lost about $175 billion to foreign buyers of their companies through takeovers in the past year.