Car subscription service Onto has raised £49.8m to fund its expansion into Europe next year.
The equity comes from a Series C funding round, led by Legal & General. It will enable the business to consolidate leadership in the UK and build a business in Germany.
Onto has experienced rapid growth, despite the global semiconductor chip shortage creating challenges in the industry, having grown more than 500% last year.
Rob Jolly, CEO and co-founder at Onto, said: “This funding round is a huge milestone for Onto as it sets us off on our journey to Europe. Germany, a nation with an incredible automotive history as Europe’s biggest car-producing country, is a market with huge potential and a great appetite for electric cars. We're excited to offer something different.”
The company already has an office in Germany and has appointed Joerg Feldheim as managing director of Onto Germany. Having worked in leadership roles in the automotive industry for over two decades, he brings extensive international startup, management and transformation experience to drive the company’s expansion.
A recent EY Consumer Index study showed 49% of car buyers want an electric vehicle as their next car, with upfront costs and concerns about charging seen as the most significant barriers for first time EV buyers.
Onto’s business model enables people to subscribe to an electric car on a monthly contract. The subscriptions are inclusive of public charging, insurance and breakdown cover, without any upfront deposit or long-term commitment.
The UK-based electric vehicle (EV) subscription provider attracted investment worth £126m, last year.
The Series C raise brings Onto’s total funding to date to more than £274m equity and debt.
Wian Pieterse, managing director, Fintech at Legal & General, said: “At Legal & General we’re committed to playing our part in tackling the climate crisis and investing with purpose into companies that do good. Onto is an exciting example of this; an ambitious company with a talented management team that will play a vital role in accelerating the transition to electric vehicles. We expect to see increasing demand for subscription models that not only pave the way towards a sustainable way of living but also meet the needs of those who don’t want to tie up valuable savings or incur a loan to buy a car.
“Onto has grown rapidly over the last four years, and we’re looking forward to working with the team to help the business scale and expand into new markets, all while investing to benefit the future of our society.”
Subscription models could help new car buyers who are hesitant about electric vehicles (EV) make the switch, according to research by What Car?.
The research of 822 of new car buyers found that 45.26% would be more interested in obtaining an EV through a subscription model rather than leasing or financing one as a means of testing the technology first.