UK’s Cazoo will list on the NYSE by way of a SPAC, valuing it at $7B and raising $1.6B

Chesterman — who already had a high profile before founding Cazoo (he had also founded LoveFilm, acquired by Amazon and used as the first step in its move into building its Netflix competitor, Amazon Prime Video; and the property sales site Zoopla) — will remain CEO of the company.

The company plans to use the proceeds of this to continue expanding across Europe after a bumper year. It said it saw sales grow by over 300% and is on track for 2021 revenues to approach $1 billion, with an ARR of $600 million in the first quarter with a business model based mostly around used-car sales but also diversifying, for example with a car subscription service.

Cazoo’s deal is a clear marker of how ubiquitous SPACs have become as an option for privately-held companies with a lot of money already on their cap tables to take the next step short of a more classic IPO on their own steam — a lengthy process that might not fit their financials or time constraints — or getting acquired.

It shows some leverage on the part of investors to bring in their own financing and strategic control to direct the companies as more than just financial backers, and indeed Dan Ochs will be joining Cazoo’s board.

“We are incredibly excited to have the opportunity to partner with Alex and the exceptional team at Cazoo. Alex has proven to be one of Europe’s most successful serial entrepreneurs and we are proud to be supporting the growth of this world-class team, brand and platform,” said Ochs in a statement. “With their constant focus on innovation, data and customer satisfaction, I have no doubt that Cazoo is going to continue to lead the way in this massive, untapped market opportunity and am looking forward to joining the Board of Cazoo and working with Alex and his team.”

But it also represents another way for them to get in on what appear to be strong businesses in the long term, at a time when technology continues to be a huge business opportunity.

“As a long-term investor in Cazoo and believer in its leadership team, we are pleased to continue supporting Cazoo’s growth as a public company,” said Daniel Sundheim, the founder of D1 Capital Partners, in a statement. “While Cazoo had many options for funding its strategy, its decision to merge with AJAX and join with Dan Och and other renowned partners was a good one that will have positive implications for the company and its future.”

In the case of Cazoo, the company has been in the right place at the right time, it seems. In a year where people stayed away from in-person shopping in the the UK, it sold and delivered 20,000 cars. It plans to expand both that sales portal and other businesses lines, such as a car subscription service it runs, which currently has 6,000+ subscribers in the UK, Germany and France. The company was founded in 2018 and in the midst of the pandemic last year raised $427 million in funding, first $116 million in March 2020 and then a further $311 million in October. The latter round valued Cazoo at just over $2.5 billion, meaning that this latest SPAC represents a big price hike.

More to come.