With a business model that resembles Carvana’s, Cazoo purchases and refurnishes vehicles prior to marketing them via the internet.
The funding increases the total investment raised for the platform to £450 million (about $580 million) and will assist in backing promotion, infrastructure and new workers.
L Catterton, Blackrock Inc. and General Catalyst were among the investors in the round.
Carvana, for its part, recently announced $1.12 billion in revenue and sales of 55,098 units in Q2.
The revenue result marked a rise of 13 percent from 2019, while the count of cars sold represents an increase of 25 percent year over year.
Carvana said in a letter to shareholders that the first half of the year has been an “unprecedented” time because of the pandemic, while it has also served as a “dynamic” moment for the firm.
Q2 concluded with “structural shifts in customer preferences leading to the strongest demand we have ever seen,” according to the letter.
Paul Hennessy, chief executive of online car selling platform Vroom, previously told PYMNTS that car sales are quickly going digital in the wake of the coronavirus as consumers realize that buying automobiles doesn’t necessitate spending a day going to multiple dealerships to locate the right deal on the right model.
The executive said that platforms such as Vroom make it possible to search through thousands of cars across the country, set up financing and have an automobile brought to one’s driveway — from the consumer’s living room.
As the coronavirus shuttered U.S. businesses throughout the nation, car dealerships have found themselves encountering a crisis as shoppers could no longer visit the showroom for a fast test drive. The situation has led dealers and automakers to revamp their business strategies with an eye toward making new digital-sales tools that provide more tailored, digital services.
AutoNation Chairman and CEO Mike Jackson said in the company’s recent earnings call, “For digital, this whole disruptive period with corona is an inflection point from which there’s no turning back.”