Motors set to buy Cazoo's brand and marketplace business: report

Cazoo's brand and marketplace business are on the verge of being sold for a fraction of what the company invested in high-profile sports sponsorships, according to Sky News.

Administrators for the British online car retailer Cazoo, once valued at over £5 billion, are reported to be close to finalising a deal to sell its marketplace division, and the Motors used car platform is understood to be the leading contender.

Motors was first rumoured to be in talks with Cazoo last month.

Sky News said industry insiders had suggested the sale price will be significantly lower than the amount Cazoo spent on sports sponsorships to boost its brand awareness since its launch in 2018.

Cazoo entered administration in May after struggling to establish a sustainable business model despite a debt restructuring last year.

Teneo Financial Advisory, the firm managing the administration, has already sold several of Cazoo's operations, leading to hundreds of job losses.

The company's wholesale arm was acquired by G3 Vehicle Auctions while Constellation Automotive, owner of Cazoo rival Cinch, also purchased several assets from the distressed company.

G3 said it was planning a ‘seven figure investment’ over the next 12 months to create a new 30,000 vehicle volume auction facility in Bedford following its acquisition of the wholesale division. It said it had acted swiftly to secure Cazoo premises, land and existing remarketing team, along with other software assets.

Founded by entrepreneur Alex Chesterman, known for creating the property portal Zoopla, Cazoo raised multiple rounds of funding at increasingly higher valuations before making its stock market debut in 2021, at which point investors valued the company at $8 billion.

Cazoo invested tens of millions of pounds in sports sponsorship deals to capture market share.

An industry source said that Cazoo's last-minute shift to a platform model had resulted in its inventory rising to more than 15,000 cars.

Chesterman departed the business several months ago following a balance sheet restructuring that converted hundreds of millions of dollars of debt into equity.

Neither Motors.co.uk nor Teneo could be reached for comment.