Would you buy a used car from a start-up? $7bn says you would.
We interviewed some of the team behind the phenomenon that is Cazoo.
Cazoo launched in late 2018 with funding of £80 million and a stock of 1,500 BCA-supplied vehicles. In only a few months prior to launch, Alex Chesterman and his team managed to create the UK’s first online used car sales business from scratch. It sold £10m of cars in its first eight weeks. The business has been on a European buying spree in recent months and has just announced its intent to list on the New York Stock exchange. We spoke to some of the team to gain insight into a phenomenal story of growth.
Two years and one pandemic on, Cazoo has a team comprising 1800 across the UK, Germany, France and Portugal. It has an imitator in the form of BCA owned Cinch (surely the most sincere form of flattery? It at least helps to grow the market). In a move central to Chesterman’s plans to change the way we access private mobility, Cazoo has acquired Europe’s two largest car subscription services Drover and Cluno . The business also plans to list on the New York Stock Exchange through a $7bn business combination with AJAX I. This will provide almost $1 billion of further funds to accelerate our growth across Europe. Yet In their own words, the team is “only just warming up”.
It’s a phenomenal story by anyone’s standards. How did it come about? The used car market is a sector with notoriously low levels of trust. Cazoo was a new brand no one had heard of and it was trying to transform buying behaviour, wanting consumers to spend tens of thousands of pounds online on a car they haven’t test driven.
“It’s such a disruptive idea that it’s not comprehensible to a lot of people,” says Kate Sims, Senior User Researcher. “Buying a used car without seeing it — who does that?!” But Cazoo’s scale, pace and funding are not typical. And it’s a clear and innovative proposition: buy a reconditioned vehicle online, and have it delivered within 72 hours, in a two-hour slot, with a seven-day money-back guarantee.
Cazoo’s achievements have, in large part, been due to a laser beam focus on the customer, keeping sight of what’s important — getting people to buy cars from them — and through execution that’s rapid but not slapdash.
“There’s no chaos,” says Communications Director Lawrence Hall. “We have the mission in place, there’s an established market [worth £50bn a year], and we all know what we’re trying to achieve. From day one we set out our values, our mission and our vision. Most start-ups don’t do that.”
Cazoo also has incredibly strong leadership. Founder Alex Chesterman’s singular vision was clear from the outset: to make it as easy to buy a used car online as it is to buy a book from Amazon. And the industry was ripe for disruption.
It also helps when you’re one of the country’s most successful digital entrepreneurs; Alex founded LoveFilm and Zoopla. The £80m funding that he raised for Cazoo pre-launch was a European record. “Alex is a visionary. He knows what he wants and he does it, so attracts great investors and great talent,” says Lawrence.
“There’s no chaos. We have the mission in place and we all know what we’re trying to achieve”
When Fluxx worked with Cazoo on consumer research, market analysis and price testing, we saw for ourselves how customer obsessed everyone is, and that the company’s ambition comes from the top. It creates a can-do attitude across the business. A lot of time and energy has been put into defining the ideal customer experience and testing the delivery process — getting the right car to the right driveway at the right time. They didn’t work on endless creative options for advertising and branding, and they decided on them quickly. Building trust and being transparent — and abolishing the industry stereotype of untrustworthiness — is a big focus. “It’s easy to say we’re all about customer service but the proof is in the pudding,” says Lawrence. “The amount of positive reviews we’ve had on Trustpilot already is really exciting.”
“We want to be a household name,” says Brand Director Lucas Bergmans. “Our ambition is to grow to a very big scale very quickly with the investment to make that happen.”
The team at Cazoo definitely seems focused on the road ahead and clearly knows where it wants to go.
A version of this article first appeared in Fluxx’s 5th book, “Now what do we do?” A copy of which can be downloaded from https://fluxx.uk.com/books
Dean is a Managing Consultant at Fluxx. For more details on our company, check out these useful links, sign up to our newsletter or get in touch at dean.wilson@fluxx.uk.com.
