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Used car unicorn Cazoo doubles valuation as it raises £240m

New and used cars pictured at a dealership in southwest London - Adrian Dennis/AFP
New and used cars pictured at a dealership in southwest London - Adrian Dennis/AFP

A UK-based unicorn selling used cars online has raised £240m, bumping the company's total value up to over £2bn.

Cazoo, which reconditions its cars before selling them from its central base in the Midlands, raised the cash from investors including Daily Mail owner DMGT.

It marks the third time Cazoo has raised cash this year, following a £100m funding round in March and £25m round in June, taking the total raised since it was founded to £450m.

Cazoo is benefiting from the online retail boom linked to the coronavirus and also an increased incentive to drive as people stay away from public transport. On Monday, passenger levels on trains across the country were at 32pc of normal levels.

Alex Chesterman, the founder & CEO of Cazoo, said: “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 added: "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."

New and existing investors, including General Catalyst, D1 Capital Partners and funds managed by Fidelity Management & Research Company and Blackrock, also took part in the round.

Mr Chesterman has a reputation as a serial dealmaker. His previous victories include selling the DVD rental service LoveFilm to Amazon for £200m and handing over the owner of property-website Zoopla to private equity firm Silver Lake in a £2.2bn all-cash deal in 2018.

Cazoo claims it has generated £100m in revenues since its launch in December 2019 but does not disclose its profits.