8:35 am, May 8, 2022
Rumours are circulating that online used car dealer Carzam has come to the end of the road.
The Times reported today (May 8) the Peterborough-based retailer ‘might be running out of road’ after sources told the newspaper Carzam is struggling to find a buyer to take on the purely online used car operation.
Moreover, The Times reports neither founders Peter Waddell and John Bailey want to inject more cash into the business.
The newspaper’s associate business editor, Jamie Nimmo, said Carzam has been ‘scrambling to find a buyer in recent weeks’, but has so far not been able to offload the business.
The column adds the £112m funding Carzam raised in November is believed to have come from New York hedge fund Davidson Kempner, ‘but in the form of debt, not equity’.
Car Dealer reported a rift between Waddell and Bailey earlier this year, with Waddell telling Car Dealer he had stepped away from the day to day running of the business over six months ago.
Since then chairman and former Paddy Power boss Andy McCue and CEO Kirk O’Callaghan have all quit Carzam.
The Times also remarked that the recent falls in share prices in both Cazoo and US site Carvana pointed to the online used car sector’s ‘bubble bursting’.
Earlier this week, Cazoo, founded by Alex Chesterman, published an explosive dossier that admitted the business ‘may never achieve profitability‘.
Carzam was set up in 2020 by Waddell and Bailey with a £50m investment to get the start-up off the ground.
The business’s operation included a prep centre in Peterborough where 350 cars a day were expected to be prepped and distributed via Carzam’s website.
However, Carzam has now pulled out of the site.
Car Dealer was shown around the facility before Carzam launched in December 2020. You can see inside the site in our video posted at the top of this story.
What is Cazoo and will it change used car sales forever? Watch our special video feature here.
