Cazoo CEO Alex Chesterman OBE is set to ring the opening bell on the New York Stock Exchange this afternoon as the used car e-commerce company goes public.
At 2:30 p.m. UK time (9:30 a.m. in New York), Cazoo begins its listing, valued at up to $ 8 billion (£ 5.8 billion), barely three years since the company was founded by serial tech entrepreneur Chesterman .
If rated, Cazoo (NYSE: CZOO) will immediately become the highest rated UK company to trade in the US.
The scope of his evaluation has been a source of discussion in the UK automobile trade.
Hargreaves Lansdown analyst Nicholas Hyett told City AM that people are divided over how to define Cazoo. for others, it’s an overvalued online trader who has to invest heavily in stocks in order to sell at relatively low margins.
Chesterman’s track record in building and selling LoveFilm and Zoopla also appeals to technology investors.
Hyett told City AM, “Online platform companies are very valuable. Once you get up to the size that Cazoo quickly does, everything is effectively profitable, ”explains Hyett.
“The problem with applying that logic to Cazoo is that it’s not just a platform business, it’s also a used car business, and that’s a very capital-intensive type of business. Even if they are very efficient, at some point they will have to buy used cars. “
In the second quarter of 2021, Cazoo sold 10,692 vehicles and had sales of £ 141 million and gross profit per unit of £ 460, a gross margin of 5%.
“We now have over 2,250 customer-obsessed employees fully focused on delivering the best, most complete car buying experience for consumers in the UK and Europe.
“Our strong performance is the result of the hard work and dedication of everyone at Cazoo and I would like to thank the entire team for this excellent performance despite the COVID restrictions during this period,” said Chesterman at the time of the Q2 results announcement.
Cazoo, which after outsourcing to BCA initially took over the inventory processing in-house, is preparing the start of used car e-commerce in Germany and France before the end of 2021.
