It wouldn’t be a fortnight without online car retailer Cazoo either making an acquisition or raising a boatload of money. This time, it’s the latter as the publicly listed company reports a new influx of capital to the tune of $630 million.
Founded in 2018 and launched just a short two years ago, Cazoo’s timing couldn’t have been better and with the help of a staff of 3,800 across the UK, France, Germany, Spain, and Portugal. has seen over 50,000 cars pass through it’s (virtual) showroom doors.
In less than a year the company has seen a public listing via a SPAC merger, record Q2 numbers, and a seemingly unending round of acquisitions including SMH Fleet Solutions for £70 million and Swipcar for €30 million, and brumbrum for €80 million.
And now, the company is adding another $630 million to the fires through a 2 percent sale via convertible senior notes, that subsequently will convert to Class A ordinary shares at a price of $5.00 per share. This price represents a 20% premium to the trailing 5 trading day volume-weighted average price of the share.
As a reminder: Cazoo's initial share price was listed at $10, a common figure for most SPAC listings, with the market then determining how much the company is worth.
As pointed out by Atreides Managment's Gavin Baker:
1) We will see more of these. Senior convertible notes at $5 vs. the original $10 SPAC merger price. Essentially growth equity rounds in illiquid public equities.
— Gavin Baker (@GavinSBaker) February 13, 2022
The purchasing parties of said shares are led by Viking Global Investors with several existing shareholders including Mubadala Investment Company, D1 Capital, and Willoughby Capital all ponying up.
This raise, when combined with Cazoo's existing cash and cash equivalent position of approximately $260 million as of December 31, 2021, will leave the company with a pro forma cash balance approaching $900 million.
Cazoo founder and CEO Alex Chesterman OBE commented, “This transaction, where we have raised an additional $630 million, further reinforces the strong belief in Cazoo from new and existing shareholders who, like us, are extremely excited about the huge market opportunity that we have ahead of us. We are now very well-funded for the coming years to continue to capitalise on this opportunity and deliver the best car buying and selling experience for consumers across the UK and Europe."
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