Cazoo and AJAX I. A $7 billion SPAC merger. And the money kept rollin’ in from every side

UK-based Cazoo, the pre-loved car portal has raised an additional $1.6 billion in a SPAC merger with AJAX I.

Providing the deal meets with the approval of shareholders of AJAX I, a special purpose acquisition company (SPAC) and Cazoo, the combined company will be named Cazoo (Really? You don't say?) and listed on the New York Stock Exchange as early as Q3 2021.

The transaction includes (up to) $805 million AJAX cash in trust and $800 million fully committed private investment in public equity (PIPE) and provides approximately $1 billion in gross cash proceeds to the combined company (remember, it's STILL named Cazoo. Just cAJAzooX).

The transaction was led by AJAX I sponsors (Dan Och and Glenn Fuhrman with board members including Kevin Systrom (Instagram) Anne Wojcicki (23andMe) Jim McKelvey (Square) and Steve Ellis (chipotle)), and Dan Sundheim's D1 Capital Partners and saw participation from new and existing investors Altimeter, BlackRock, Counterpoint Global (Morgan Stanley) and Fidelity Management and Research Company, Marcho Partners, Mubadala Capital, Pelham Capital, Senator Investment Group (which is interesting, as the founders of the $6.9 billion fund are going separate ways) and Spruce House Partnership.

Founded in 2018, Cazoo is in the UK market of shifting the age old enjoyment of kicking the tyres and wafting in that new (to you) car smell before signing on the dotted line, to a fully online process. To date, they’ve delivered over 20,000 cars to consumers across the UK who’ve chosen to forgo the fun of sitting in what could be their next car, opting for pixel peeping instead of piston peeping.

Martin Davis, CEO at Draper Esprit comments, “Cazoo are tapping into a huge potential market and we’ve witnessed their breath-taking growth over the last 12 months.”

Sure, Cazoo has seen impressive growth, and we've covered a number of their funding rounds and acquisitions, but this author does have to ask; how much of this is true growth, and how much is fueled by physical car dealerships having their doors shuttered by law?

And if you’re wondering why a Europe-based company is listing on the NYSE via a SPAC, you’d not be the first, as it would appear that Europe is late to the game again, and the money flows across the pond. Again.