“From glory to pain, Cazoo’s adventure in the world of tech companies is set to be repeated”

againstLike meteorites, rhinos, these tiny shoots valued at more than a billion euros, always end up touching the ground. Kazuo was a shining star that financiers were still talking about in 2021 with shining eyes. The British start-up that specializes in selling used cars online, was to revolutionize the market with its attractive marketing, in a booming market.

Ostensibly avoiding the financial center of London, it favored the lights of Wall Street, with an initial public offering in March 2021, through a private company, SPAC, a very fashionable car for that suddenly distant time. Suddenly, the company was valued at over $7 billion (6.5 billion euros) and would have raised over a billion in funds to set out on a world conquest. It was published in France, Germany and Portugal and bought competitors and imprinted itself on the shirts of OM players …

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Today, the stock market is divided into almost ten, and the company is working on folding the web. On Tuesday, June 7, it announced the departure of 750 of its employees, representing 15% of its employees. This is only the beginning. Cazoo is losing a lot of money (650 million euros against 790 million in turnover) and thus is burning off the billions that it managed to borrow from investors. However, the era is no longer for credit-financed adventures. Even giants like Netflix, Tesla, or Amazon are launching savings plans and lowering their ambitions.

The time for easy money ends suddenly

The reason is simple, as London society acknowledges. A perfect storm in which the bad winds of inflation, supply disruptions and high interest rates mix. However, in 2021, the skies were so cloudless…the lack of auto components boosted the flea market for a while. But this shortage of new cars led to a shortage of modern used cars and consequently higher prices, which gradually drove buyers away. They are also facing inflation that we haven’t seen in forty years in the UK. So we make choices, and put off our big purchases. Especially as loans become more expensive.

Investors have not disappeared, but they are becoming more cautious about the new central bank policy

There is no death in this job. The French company Aramis, the main competitor of the British in Europe, the oldest in business, was profitable until 2021, when the shortage of new cars also affected it. He also took refuge in the bosom of Stellantis, which controls the majority of the capital. But times will be tough for unicorns and other internet or digital superstars. From glory to pain, Cazoo’s adventure in the world of tech companies is set to be repeated.

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