Just days later, however, Cazoo stunned the stock market with a bombshell announcement that it was facing a cash crunch.
The company warned that it was in danger of running out of funding in the first six months of 2024 unless it succeeded in raising additional capital. It said it expected to end the year with a cash pile of between £100m and £115m, and an additional £20m to £30m worth of cars in stock.
However, the company cautioned it was burning through £30m to £40m every quarter, and restrictions on its lending agreements meant it had to maintain a cash cushion of £50m, starting from the beginning of the year.
“If we are unable to obtain adequate financing…our ability to continue as a going concern…could be significantly limited, and this could have a material adverse effect on our business, financial condition, results of operations and prospects,” it said in a filing with US regulators.
Cazoo’s Wall Street listing valued it at $8bn, catapulting Chesterman into the ranks of the super-rich and crystallising a big payday for other key backers, which included the publisher of The Daily Mail.
Chesterman ruffled industry feathers in a newspaper interview in which he called the traditional method of selling cars “flawed on every level”.
Cazoo spent tens of millions of pounds a year on sport sponsorship deals and advertising in a bid to boost its profile as management drew up ambitious plans to conquer Europe.
Its name ended up on at least nine football clubs, including those of Premier League stalwarts Everton and Aston Villa, as well as Spanish clubs Valencia and Real Sociedad, French giants Olympique de Marseille, and Germany’s SC Freiburg.
It also became a main sponsor of the St Leger Stakes horse race, the Hundred cricket tournament, the Rugby League World Cup, the World Snooker Tour and the PDC World Darts Championship.
The company’s marketing spend topped £45m in the first six months of 2022 alone but by the second half of the year, the budget was being reined in as Cazoo’s fortunes nosedived, forcing it to undertake swingeing cost cuts.
Read More: Used car dealer Cazoo seeks cash lifeline to escape insolvency