31st August 2021
Good morning After the last bank holiday before Christmas it’s encouraging to hear that trade union body, the TUC, is calling for British workers to get four more to ‘level us up with other workers around the world’. England and Wales have eight public holidays a year, which is four fewer than the EU average and half the number in Japan.
- British car start up goes public in New York
- Former Silicon Valley darling on trial
British car start up goes public in New York
What’s going on?
On Friday, three year-old used car marketplace, Cazoo, went public on the New York Stock Exchange. The $8bn valuation makes it the highest valued UK firm in the US stock market.
Why is this important?
Cazoo’s mission is to digitise the car buying process from start to end. The company lists thousands of cars in stock at any time, all stored in the Midlands. Cars can either be home delivered anywhere in the UK or for collection from one of 21 customer centres within 72 hours.
Cazoo has had a meteoric rise to prominence since launching in 2018 with high profile sponsorships of Premier League teams Aston Villa and Everton. To date the company has sold over 35,000 cars.
Its founder Alex Chesterman is a serial entrepreneur who has made a career out of copycatting successful US startups. He sold LoveFilm, an early Netflix rival, to Amazon for £200m and property search site Zoopla for £2.2bn. The Cazoo listing makes it a hattrick of successful deals for Chesterman and would see his personal worth reach $2bn.
The funds raised from the listing will be used to launch Cazoo's online car-buying service into France and Germany and expand its car-subscription business.
Cazoo’s decision to go public in the US and not UK came as a blow to the City which is trying to attract more online businesses. The company ended its first day of trading with shares rising by nearly 8%.
Cazoo’s $8bn valuation has raised eyebrows from some who question how it could be worth more than rival car dealerships like Pendragon and Lookers who sell more cars. But some argue that investors are buying into the founder’s previous successes.
Former Silicon Valley darling on trial
Back in 2003 19-year-old, Elizabeth Holmes, dropped out of Stanford University to start Theranos, a healthcare firm. Almost 20 years on Holmes is about to go on trial, charged with defrauding investors and clients.
So how did it all go wrong?
Theranos claimed it invented a machine that could test for diseases with a single drop of blood. It was aiming to transform the health industry by performing life saving tests in convenient locations like the supermarket, at a fraction of their usual costs.
At its peak in the company raised millions of dollars from big name investors like the Walmart founders the Walton family and media mogul Rupert Murdoch. At one time Theranos was valued at $10bn making founder Holmes the youngest ever self-made woman billionaire.
Holmes also drew a lot of attention as a female tech founder in a largely male dominated Silicon Valley.
Theranos was notoriously secretive, sharing very little about its technology with the public or medical community.
But in 2015 a Wall Street Journal expose marked the beginning of the end. The article, based on whistle-blower reports and data analysis, showed that the Theranos technology did not live up to its claims. In 2018, the company shut down.
Holmes and the former Theranos President (on trial next year) are now accused of scamming $700m out of investors.
They are also accused of using the money from investors to pay for their luxury lifestyles. If found guilty Holmes could face 20 years in prison.
Holmes has been held as an example of how the ‘fake it until you make it’ culture in the start up world can go awry. The outcome of her trial could shape the way Silicon Valley evaluates start ups in the future.
Stat of the day
Contactless card limit will rise from £45 to £100 in October
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