Cazoo Ltd., the British used-car platform, agreed to sell itself to a blank-check company for $7 billion.
The deal with special-purpose acquisition company Ajax I will raise about $1.6 billion in proceeds, including $805 million in a cash trust from the SPAC and another $800 million from Ajax’s sponsors, Cazoo said in a statement on Monday. London-based Cazoo will be listed in New York after the deal closes.
The company, which buys and restores used cars and delivers them directly to buyers, was valued at more than $2 billion after raising funds in October. Cazoo had been weighing an initial public offering after the successful listing of its German counterpart, Auto1 Group SE, which raised 1.8 billion euros ($2.1 billion) earlier this year.
Online car sales have surged during COVID-19 lockdowns as traditional dealerships were forced to shut, and Cazoo said it expects sales to rise to nearly $1 billion this year, a 300 percent growth rate. Shares of Phoenix-based Carvana Co., which went public with a similar business model in 2017, have jumped more than 400 percent in the last 12 months, and it’s made its founders billionaires.
Cazoo was founded in 2018 by Alex Chesterman, a serial entrepreneur who previously founded property search website Zoopla and early streaming video and mail-order DVD rental service LoveFilm. Investors include Blackrock Inc., General Catalyst, D1 Capital Partners, Mubadala Capital, L Catterton and others.