British car retailer Cazoo has fallen into administration after a rescue deal failed to be secured.

The London-based company has appointed David Soden and Matthew Mawhinney of Teneo Financial Advisory as joint administrators.

Cazoo Ltd, Cazoo Holdings Limited and Cazoo Properties Limited have been placed into administration while parent company Cazoo Group is to be put into voluntary liquidation.

Cazoo, which was founded in 2018 by Alex Chesterman, was worth more than US$7bn when it was listed on the New York Stock Exchange in September 2021, but valuation has now dropped to just US$30m.

The news comes after Cazoo changed its business model in March from a dealer model to an automotive marketplace, along with more than 700 redundancies as part of extensive cost-cutting measures and the departure of its chief executive Paul Whitehead.

A Teneo statement said: “The marketplace model is now established, revenue generating and performing ahead of expectations with interest from almost one hundred car dealers including many household names wishing to trade on the Cazoo platform.

“Following the group’s successful transition, to optimise returns to creditors, the administration filing marks the appropriate next step in the restructuring of the business.

“The director placed the companies into administration to allow the joint administrators to continue discussions with new and existing parties interested in the marketplace business, with a view to concluding a sale over the coming weeks.”

Joint administrator Matt Mawhinney said: “Following our appointment, we continue to progress discussions with a number of interested parties on the marketplace business and remaining customer collections centres.”

“The marketplace model is performing ahead of expectations, with strong dealer sign up, and the administration appointment provides us with an opportunity to secure a sale of the business over the course of coming weeks.”