Cazoo, the UK-based online automotive marketplace that counts media group Daily Mail and General Trust (DMGT) as an investor agreed a reverse merger with special purpose acquisition company Ajax I yesterday.
The combined company will take on the New York Stock Exchange listing obtained by Ajax through its $750m initial public offering in October 2020. The deal will be boosted by $800m in private investment in public equity (PIPE) financing at a $7bn valuation.
Ajax’s sponsors and D1 Capital Partners are anchoring the PIPE, which includes investment and financial services group Fidelity, Morgan Stanley’s Counterpoint Global unit, Altimeter, Marcho Partners, Mubadala Capital, Pelham Capital, Senator Investment Group, Spruce House Partnership and funds and accounts managed by BlackRock.
Cazoo operates an e-commerce platform where customers in the UK, Germany, France and Portugal can buy and sell vehicles.
The company has also built a monthly car subscription business with the purchases of Drover and Cluno in the past four months, and said it expects to book near to $1bn in revenue this year.
The transaction comes in the wake of approximately $558m in funding including $308m in an October 2020 round co-led by General Catalyst, D1 Capital Partners and funds managed by Fidelity and Blackrock that also featured DMGT subsidiary DMG Ventures.
L Catterton, Durable Capital Partners, Spruce House Partnership, Novator, Mubadala Capital and undisclosed others also took part in the October round, which reportedly valued Cazoo above $2.5bn.
Draper Esprit led a $31.3m round for the company in June 2020, investing alongside DMG Ventures and General Catalyst at a valuation over $1bn.
The June round came just three months after DMG Ventures led a $117m round backed by Fidelity’s Eight Roads Ventures unit, Groupe Frère-Bourgeois’ CNP subsidiary, Mubadala Capital, General Catalyst, Octopus Ventures and Stride.VC.
Cazoo had secured $32.2m from investors including Mubadala Capital and General Catalyst in December 2019, when it officially launched its platform.
DMG Ventures joined Stride.VC, Entrée Capital and Octopus Ventures to invest $30.4m in the company in September 2019, nine months after the same backers had supplied $38.3m in funding.
Alex Chesterman Cazoo’s founder and CEO, said: “This announcement is another major milestone in our continued drive to transform the way people buy cars across Europe. We have created the most comprehensive and fully integrated offering in the largest retail sector which currently has very low digital penetration.”
