Cazoo is a car dealership that purchases and sells vehicles completely online. Cars are delivered directly to the customer’s desired location.
The company, which is headquartered in London, England, was founded in 2018 by Alexander Edward Chesterman.
Cazoo’s primary selling points are convenience as well as a haggle-free purchasing and sales process. When selling your car to the company, you can either have it picked up for £99 or drop it off at one of Cazoo’s distribution centers.
Cazoo only purchases cars that fit certain criteria, including being younger than 15 years, having less than 150,000 miles, didn’t have an accident, having no outstanding finance, and so forth.
Those cars, depending on their state, are then refurbished and prepped to be sold via its website. Users can either purchase cars directly (in cash) or apply for various financing options.
Each car for sale boasts a variety of data points such as 360-degree imaginary, age, mileage, running costs, and anything else that is relevant. Once the purchase is completed, the car is either picked up by the buyer or delivered to the customer’s doorstep.
Buyers are then given seven days to decide whether they want to keep the vehicle or get fully refunded. Customers are given a free 90-day warranty and RAC roadside assistance on top of that.
Founder and CEO Alex Chesterman, who still owns a large chunk of Cazoo, had previously started two companies before embarking on revolutionizing the automotive industry. In 2003, he co-founded the DVD rental company LoveFilm. Five years later, he started Zoopla, one of the U.K.’s leading property sites.
Being an experienced entrepreneur gave him the credibility to raise around $2 billion in debt and equity funding. Cazoo netted another $1 billion when it went public in August 2021.
In 2021, Cazoo generated £668 million (~ $838 million) in revenue, up 312 percent from the year prior. The firm, which employs over 2,000 people, managed to sell close to 50,000 vehicles over that timespan.
Unfortunately, economic developments have also caught up with the firm. Throughout 2022, the firm plans to lay off 1,500 employees and close down operations in all of its foreign markets (France, Germany, Italy, and Spain).
The methodology with which competitors of Cazoo are ranked is based on a variety of data points. Information such as revenue, the number of purchased and sold cars, site visitors, employee count, and anything else in between will be considered.
This analysis looks both at online car dealerships as well as listings sites. Physical car dealerships will thus be excluded.
It has to be noted that this analysis should not be seen as a purchase recommendation. It is merely a summary of the competition that Cazoo faces as of today.
So, without further ado, let’s take a closer look at the top 10 competitors of Cazoo.
Headquarters: Farnham, Surrey Founder(s): Avril Palmer-Baunack Year Founded: 2019
Cinch, despite only being in business since October 2020, has quickly risen to become one of Cazoo’s biggest competitors.
The firm essentially provides the same service. However, Cinch is stricter about what cars it purchases. For example, any car above 70,000 miles is out of its price range. Each sold car, furthermore, goes through a 225-point check before it is put up for sale.
Additionally, Cinch provides a slightly longer testing period, allowing buyers to test-drive their car for 14 days before making a decision.
Cinch was spun out of Constellation Automotive Group, a holding company that owns brands such as webuyanycar, BCA, CarNext.com, and more. The firm has raised $1 billion in funding to get Cinch off the ground. On top of that, webuyanycar works together with Cinch to provide the latter with car valuations.
Some of that money was used to market the brand by partnering with teams such as Tottenham Hotspur or the Northampton Saints football club.
Constellation Automotive Group generated £3.45 billion in annual revenue for the fiscal year 2021. However, it does not disclose specific revenue figures for Cinch, which employs over 500 people.
2. Auto Trader
Headquarters: Manchester, England Founder(s): John Madejski Year Founded: 1977
Auto Trader, not to be mistaken with the American version (Autotrader.com), is the U.K.’s leading vehicle listing site. In fact, with 64 million monthly visitors and 430,000 cars in stock, it is considered the 13th most viewed website in the country.
On Auto Trader, customers can purchase both new as well as used cars, apply for financing or leasing, get a valuation on their current models, check a vehicle’s history, consume expert reviews, and (much like Cazoo) have over 300,000 cars delivered right to one’s doorstep.
The vehicles advertised on Auto Trader are sourced from individual owners, dealerships, car rental companies, and the manufacturers themselves.
Auto Trader began as a small regional classified advertising magazine called Thames Valley Trader. Eleven years later, it was officially renamed into Auto Trader. In 1995, the firm finally expanded abroad by launching in Ireland and, a year after, finally goes online with its first website.
Not long after, in 1998, VC firm BC Partners acquired a significant stake in the firm for £260 million. Two years later, the Guardian Media Group merged the offline and online business with Hurst Publishing to create Trader Media, Auto Trader’s parent company.
Today, Auto Trader generates £432.7 million in annual revenue (fiscal year 2022). Profits are equal to £303.6 million. Close to 14,000 retailers are live on the platform at any given time while Auto Trader itself employs around 960 people.
Source: Auto Trader
3. AUTO1 Group
Headquarters: Berlin, Germany Founder(s): Christian Bertermann, Hakan Koc Year Founded: 2012
AUTO1 claims to be Europe’s leading digital automotive platform for purchasing and selling used cars online. The holding company operates in 30 countries and therefore competes against Cazoo in each of its markets.
It started out back in its home country Germany when it launched wirkaufendeinauto.de, which allows car owners to sell their vehicles within hours and completely online. Additionally, the group also operates the namesake Auto1.com platform, which works together with 60,000 dealerships across Europe.
Over 3,000 cars are added to the platform, which has 30,000+ vehicles in stock at any given time, on a daily basis. Cars can be picked up and dropped off in more than 400 locations across the European continent.
In 2021, AUTO1 managed to sell 600,000 cars while generating €4.8 billion ($5.15 billion) in annual revenue. AUTO1, which employs more than 5,000 people, had previously raised $1.4 billion in funding.
The firm’s continuous growth eventually enabled it to go public back in February 2021, allowing it to add another €1.8 billion to its balance sheet.
Headquarters: London, England Founder(s): Alexandra Margolis, David Santoro, James Hind Year Founded: 2013
The three founders, before launching carwow back in 2013, were running the car research platform carbuzz, which offered aggregated expert reviews, user reviews, statistics, and other types of data points.
However, after lagging success, they decided to pivot into becoming a marketplace and launched carwow in 2013. The carwow platform connects buyers and sellers with dealers. For example, when buying a car, you simply choose the model as well as the required specs. Dealers can then submit bids for any vehicle that matches the stated requirements.
What is unique about carwow is the platform’s approach to content. In fact, it claims to run “the world’s most popular car YouTube channel” with over 70 million views per month and more than seven million followers.
Investors have been loyally following the firm as well. They invested a total of $157.6 million into carwow, which is currently valued at $1 billion. The 12 million users registered on carwow are met with demand from 3,000+ certified dealer partners. In 2020, carwow generated £22.5 million in revenue.
Headquarters: Berlin, Germany Founder(s): Volkswagen Year Founded: 2017
Heycar is a mixture of a listing site as well as an online dealership on which buyers can purchase new and used vehicles. The cars offered for sale are either sourced from certified dealerships or the big manufacturers.
Vehicles have less than 100,000 miles on the clock and are under eight years of age. Customers, in any case, receive a 10-day money-back guarantee to test the car.
The involvement of car manufacturers doesn’t come as much of a surprise since Heycar has been incorporated as a sub-division of German car manufacturer Volkswagen. When it launched in the U.K. in April 2019, it did so with Mercedes Benz (Allianz and Renault are also shareholders).
Heycar has since launched dedicated sites in Spain (2020) and France (2021), which means Heycar used to compete with Cazoo in four countries. However, Cazoo’s 2022 closures and layoffs means that the two firms now only go against each other in the United Kingdom.
Headquarters: Cambridge, Massachusetts Founder(s): Langley Steinert Year Founded: 2006
CarGurus claims to be the leading vehicle listing site in the United States, boasting over 38 million monthly unique visitors. Back in 2015, it launched a dedicated U.K. site, which is now one of the bigger listing sites in the country.
CEO and founder Langley Steinert had previously co-founded travel review site TripAdvisor. It, therefore, came as little surprise that he first tried to establish CarGurus as a review platform for dealerships, car models, and more. After 1.5 years, he was forced to undergo a pivot as the review business wasn’t taking off as expected.
In the coming years, he grew CarGurus into one of the biggest automotive sites across the globe – despite raising less than $2 million in venture funding. In October 2017, he took the firm public, adding $150 million to its balance sheet.
Apart from the U.K., CarGurus has also launched a dedicated site for Canada. The platform works together with 30,000 dealers and boasts 5 million listings across its various web properties.
CarGurus, furthermore, generated $951.4 million in revenue for 2021 (of which a third could be attributed to its two foreign websites).
7. eBay Motors
Headquarters: San Jose, California Founder(s): Simon Rothman Year Founded: 2000
On eBay Motors, shoppers can browse hundreds of thousands of vehicles as well as car part listings. It only took eBay six years to sell its two-millionth car via the platform.
Today, thousands of professional dealerships are registered on eBay’s vehicle classifieds platform. Its app also includes a section called My Garage. There, users can select, save, and ultimately purchase the parts that are associated with the car they own.
Close to 7.5 million unique visitors access eBay Motors’ app and website every month. Tens of thousands of vehicles are listed on the platform while it also is home to over 500 million parts and accessories.
Headquarters: Abingdon, Oxfordshire Founder(s): unknown Year Founded: 2007
Motors.co.uk is the country’s leading pure-play automotive classifieds platform. Close to 270,000 vehicles are available for sale on the platform.
The vehicles advertised on Motors.co.uk are sourced from franchises and independent car dealers, car supermarkets, and private sellers. Motors.co.uk derives most of its revenue from fees it charges for creating a listing.
Motors.co.uk, apart from car listings, also publishes extensive reviews on upcoming models, news on anything automotive, and even creates explainer videos. Its website alone is being accessed over four million times each month.
Headquarters: Peterborough, England Founder(s): Bauer Media Group Year Founded: 1972
Parker’s began life as a publication that provided readers with a monthly car valuation booklet to help potential buyers get the best price for their trade-in or when they purchased a new vehicle.
The magazine eventually expanded to include reviews, technical specifications, and market as well as industry intelligence data, among others. While the physical magazine was discontinued in January 2020, its website (launched in 1998) is still going strong.
Naturally, Parker’s has also expanded into the classifieds segment and now lists hundreds of thousands of vehicles on its website. The site, furthermore, boasts an extensive collection of informative content ranging from car tax advice all the way to free vehicle valuations.
The Bauer Media Group, which has owned and operated the brand for over 50 years, does currently not disclose how much revenue Parker’s generates. Its website is accessed around 3.5 million times each month.
10. Facebook Marketplace
Headquarters: Menlo Park, California Founder(s): Facebook Year Founded: 2016
Back in 2016, Facebook launched its Marketplace product, enabling any user to sell and purchase goods and services. And just like eBay, its marketplace section also includes vehicles as well as car parts for sale.
The core Facebook platform boasts three billion users, which enabled Marketplace to reach its one-billionth user five years after launching (April 2021). Additionally, over one million official shops are registered as well.
With regards to automotive listings, Facebook works together with dealerships via its Marketplace for Business service. The offering is available in selected countries such as the United States, France, or Germany. Facebook claims that over one million people click on a vehicle listing every month (= unique monthly users).
Given Facebook’s tendency to attract negative sentiment, it hasn’t all been smooth sailing. For instance, in 2021, it removed bulk listing uploads, forcing business owners to create separate listings (which significantly increased the effort required). Facebook reasoned that this would create a higher quality of cars in its marketplace.