Simply as his property web site Zoopla was taking off, Alex Chesterman made a vow that there could be no extra start-ups.
His spouse had simply stated no to extra kids after their second — a choice he promised to match by calling it a day after two profitable however time consuming companies that yielded a number of hundred million kilos for the UK entrepreneur.
However that pledge was shortly damaged. This week, the 51-year-old Londoner revealed plans to checklist his two-year-old start-up car retailer Cazoo in New York at a valuation of $7bn, utilizing billionaire investor Daniel Och’s particular objective acquisition firm.
The deal is his greatest but — and the very best preliminary itemizing worth of any UK firm on the New York Inventory Trade. However it will likely be a significant check for Chesterman as he seeks to scale up the enterprise quickly to justify a valuation that some within the UK tech market suppose quite excessive.
“Its definitely appears on the mistaken worth now,” stated one outstanding VC investor, “whether or not it will likely be in future is the query”.
However his file offers buyers hope. For a self-confessed imitator of different folks’s concepts, Chesterman has managed to show his personal frustrations over markets in want of a shake-up into a number of fortunes and an enduring impression on the UK client.
Lovefilm, the DVD rental service he offered for £200m in 2011 to Amazon because the UK’s reply to Netflix, preceded the tip of the excessive road video retailer.
Zoopla, the property portal he floated in 2014 and sold to Silver Lake for £2.2bn in 2018, netting him about £300m, tapped into the British obsession with the values of different folks’s homes, at a price to conventional property brokers.
He needs Cazoo to do the identical to the used automotive gross sales forecourt — making the method of shopping for a car faster, decrease price and along with your buy delivered to your door.
The deal will make about £100m for Chesterman — who owns a couple of quarter of Cazoo — on high of an identical quantity final autumn on the firm’s final non-public fundraising.
All three start-ups got here from recognizing the success of others within the US — Cazoo from a TV advert for US automotive vendor Carvana — however transplanted and adjusted for the European market.
He describes it as “second mover benefit . . . we’re the primary in our market, however having let others work out what works and doesn’t work”.
Chesterman is usually handled with suspicion by incumbents — some sellers are nonetheless sceptical whether or not Cazoo will make a revenue. He admits that he’s unlikely to know extra about these markets however has discovered that ignorance could be a bonus.
“Fixing stuff that’s damaged,” as he places it. “I like to look at movies, I dwell in a home, I drive a automotive. In the event you suppose like a client, and if you happen to suppose that there’s a approach to enhance that market, then it’s doubtless that the majority shoppers really feel the identical approach.”
Chesterman, who was educated at St Paul’s Faculty after which College Faculty London, had a suggestion to work at Goldman Sachs when a household pal provided as an alternative to place him on the administration programme for the Laborious Rock Cafe in Florida.
He supposed to take a 3 month sabbatical there however ended up spending 10 years within the US, first working a department of Laborious Rock after which, when the identical pal began Planet Hollywood, becoming a member of as one among its first staff.
A household emergency introduced him again to London, the place he initially sought to proceed his profession in hospitality with a bagel store chain in 1999. Realising it was value extra for its actual property, he noticed the chance within the mid-noughties tech sector with DVD residence supply.
Those that work with him say he could be emotionally indifferent and obsessive over particulars. Others describe him as a canny deal maker — each in bolting on smaller rivals to construct companies and figuring out the perfect time to promote.
“He’s not a flash man,” stated one one that has labored intently with him, “and he works all hours given; he might have retired years in the past”.
Chesterman drives a Vary Rover — although says he would purchase his subsequent automotive from Cazoo when the time comes — and lives in a home in Highgate in London. His cash is spent on taking his household on vacation, though as an angel investor he has additionally purchased stakes in start-ups equivalent to Graze, CarWow and Farmdrop.
However his time in the meanwhile is dominated by Cazoo, which he sees as his greatest probability but — predicting it will likely be a £20bn enterprise. In floating in New York, he says he needs to take it to buyers that perceive his enterprise finest and that London doesn’t need quick rising however loss making start-ups. No quantity of itemizing reforms as promised by the federal government would have modified that.
“I feel that is in all probability my final one,” he says of his involvement with Cazoo, earlier than including: “However I’ve been caught having stated that earlier than.”