Cash-strapped online car retailer Cazoo must urgently secure additional capital before the second half of 2024 if it is to keep afloat.

In a US regulatory filing on December 18, the company stated that it may need to make substantial adjustments, or potentially cease operations altogether, if it fails to secure adequate funding.

"We expect to continue to be impacted by the challenging UK and global macroeconomic environment, which could adversely impact our ability to sustain revenue growth consistent with the past, or at all, over the next twelve months," it stated. 

“We have limited liquidity and will need to raise additional capital before the beginning of the second half of 2024 in order to satisfy our liquidity needs going forward, as well as to pursue our business objectives and to capitalise on business opportunities, and there is no assurance that we will be able to raise the necessary capital on terms acceptable to us or at all.”

As of June 30, Cazoo reported cash and cash equivalents totalling £194.6 million ($246.11 million) and anticipates closing the year with cash ranging between £100m and £115m.

The cautionary statement follows Cazoo's recent announcement of have completed restructuring resulting in a reduction of debt from $630m to $200m.

At that point, the business stated that the new financial structure would provide Cazoo with a significantly improved foundation and pave the way for its next phase of growth.

To manage financial resources more prudently, the company said it aimed to reduce quarterly cash utilisation to a range of between £25m -£35m starting in 2024, in contrast to the current £30m to £40m.

Paul Whitehead, the current CEO of Cazoo, said at the time: "Completion of these transactions represents a significant turning point for Cazoo. With an enhanced capital structure and positive operational momentum, as evidenced by our consecutive record retail GPU figures and vastly improved unit economics, we can approach 2024 with confidence."

Cazoo, founded to revolutionise the car-buying experience through online sales, experienced rapid expansion by acquiring businesses such as Imperial Car Supermarkets, vehicle preparation sites, and car subscription companies.

It launched its UK used car retail portal in late 2019 with pre-launch support of £80m and an inventory of 1,500 vehicles supplied by BCA.

Earlier this year, Cazoo disclosed a staggering £704m in losses for 2022. Despite a 91% increase in revenues to £1.25 billion and the delivery of 65,366 units in the 12-month period ending December 31, the New York Stock Exchange-listed company incurred heavy losses and streamlined its UK car handover network and workforce, aimed at making annual savings of £200m.

Despite robust marketing efforts and sponsorship deals, Cazoo has struggled to achieve profitability, leading to a significant drop in its valuation from nearly $7bn at its 2021 launch on the New York Stock Exchange.