Potential buyers have been circling UK-based used car seller Cazoo, which faces bankruptcy less than three years after floating on the New York Stock Exchange at a $7 billion valuation.
The platform, which said Wednesday that it would appoint administrators after failing to secure extra funding , has seen its share price fall 99.9% from its debut.
Sky News reported that rival Motors.co.uk is among those interested in buying what is left of the struggling business, which comprises its online marketplace, brand and intellectual property.
Cazoo, which went public via a SPAC merger in 2021, has already been through a restructuring. In December, founder Alex Chesterman stepped down as it refinanced its $630 million of debt. Then, in March, Cazoo said it would stop selling cars directly to transition into a pure-play online marketplace model.
The car marketplace is not the only US SPAC merger from 2021 involving a UK-founded tech startup to go sideways after securing eye-watering valuations.
Digital health company Babylon Health went public just two months after Cazoo when it was acquired by US-listed blank-check company Alkuri Global Acquisition Corp. at a $2 billion valuation. However, the company filed for bankruptcy protection in August 2023 after facing numerous internal and regulatory issues.
Around the same time, UK-based vehicle data company Wejo, which went public via a reverse merger in 2021 at a $800 million valuation, also started bankruptcy proceedings. Then in February, UK electric vehicle maker Arrival filed for bankruptcy protection after getting kicked off the Nasdaq. Arrival was valued at $13 billion when it merged with CIIG Merger Corp. in 2021.
The downfall of companies like Babylon, Cazoo and Arrival comes at a time when many UK companies have eschewed listing in London in favor of US markets, in part due to poor performance of previous tech listings in the city.
However, while two of the biggest tech companies to list in London in 2021—Wise and Deliveroo—may trade at a discount to their listing prices, they have fared much better than many of their US-listed peers in the long run.
Featured image by John Keeble/Getty Images
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