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Electric car subscription service Onto raises $60 million to kick off European expansion
- Onto will enter Germany in early 2023 as it seeks to accelerate electric car adoption across Europe.
- The funding round was led by Legal & General.
[London, 27th July 2022] All-inclusive electric car subscription service On, raised US$60 million in equity in a Series C funding round led by Legal & General. The cycle will allow the company to consolidate its leadership in the United Kingdom and to expand in Europe, starting with Germany.
The investment comes as the UK-based sustainable mobility business continues to experience rapid growth, having grown by more than 500% in the past year. This growth comes despite the global shortage of semiconductor chips which is creating challenges in the industry.
The innovative business model allows people to subscribe to an electric car on a monthly contract. Subscriptions include public charging, insurance and breakdown cover, with no down payment or long-term commitment. Onto disrupts traditional ownership models by offering consumers a truly flexible subscription alternative.
Currently the UK’s leading car subscription service, Onto will use the investment to launch in Germany in 2023 as it seeks to accelerate electric car adoption in continental Europe and secure its position as the go-to brand for those looking to go electric. The company already has an office in Germany and has welcomed its new Managing Director for Germany, Joerg Feldheim. Having held leadership positions in the automotive industry for over two decades, Joerg brings extensive international start-up, management and transformation experience to drive the company’s expansion.
Onto’s business model is based on three key trends. As part of the subscription economy, Onto focuses on use rather than ownership, giving drivers more choice and flexibility around the car they drive.
At the same time, digitization is having a significant impact on the automotive industry, Onto has streamlined the entire user experience by digitizing the end-to-end user journey.
From registering and reserving a car online to having it delivered to your doorstep in just a few days, the focus on simplicity of the user journey is playing on growing consumer demand for ease and convenience.
Finally, the increase marks an important moment for the journey to net zero as the transition to carbon-free mobility gathers pace. Along with government plans to ban the sale of new petrol and diesel cars by 2030, consumers are increasingly looking for ways to make the switch.
Leading financial services firm Legal & General led the round. Existing investors including Alfvén & Didrikson, Accelerated Digital Ventures, Cerebrum Tech Limited and Jim O’Neill’s family office participated in the round. The Series C raise brings Onto’s total funding to date to over $330 million in equity and debt.
Onto’s monthly subscription service includes 750 miles per month, insurance, care and maintenance, and free public charging at over 12,500 locations through its UK network of charging partners – Shell Recharge, BP Pulse, InstaVolt and Tesla Supercharger.
Rob Jolly, CEO and Co-Founder of Onto, said:
“This funding round is an important milestone for Onto as it launches us on our journey to Europe. Germany, a nation with an incredible automotive history as Europe’s largest car-producing country, is a market with huge potential and a big appetite for electricity.We are excited to offer something different.
A recent study by EY’s Consumer Index showed that 49% of car buyers want an electric vehicle as their next car, with upfront costs and charging concerns seen as the most significant hurdles for first-time buyers of electric vehicles. With almost 90% of our customers preferring the convenience of an all-inclusive package that covers everything – even public charging – our unique proposition meets the needs of these customers with a choice of 18 cars. models.
Onto takes the hassle and effort out of getting an electric vehicle. We believe that making it simple and easy to get an electric car is key to building a sustainable future.”
Wian Pieterse, Managing Director, Fintech at Legal & General, said:
“At Legal & General, we are committed to playing our part in tackling the climate crisis and investing with determination in companies that do good. Onto is an exciting example of this; an ambitious company with a leadership team talent who will play a vital role in accelerating the transition to electric vehicles. We expect to see growing demand for subscription models that not only pave the way for a sustainable lifestyle, but also meet the needs of those who do not don’t want to tie up valuable savings or take out a loan to buy a car.
“Onto has grown rapidly over the past four years, and we look forward to working with the team to help the businessss evolve and expand into new markets, while investing for the benefit of the future of our society”.
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Onwas founded in 2017 by Rob Jolly and Dannan O’Meachair and offers motorists an accessible, flexible and easy way to join the electric vehicle revolution. Over the past five years, Onto’s innovative new all-inclusive car subscription service has proven a hit with consumers – enabling many to move away from the traditional internal combustion engine. Since 2018, Onto has grown rapidly, partnering with new charging and electric car providers as more electric vehicles become available for all budgets. Onto currently offers 18 models, with subscriptions starting at £489 per month.
In 2020 On the way to business was launched which offers companies a flexible, non-binding car subscription solution for their employees. Both parties can take advantage of the tax savings and to date over 100 companies own over 600 vehicles through an Onto for Business subscription.
About Legal and General
Founded in 1836, Legal & General is one of the UK’s leading financial services groups and a major global investor, with over £1.4 trillion in assets under management*, a third of which are international. L&G also provides powerful asset origination capabilities. Together, these underpin our industry-leading pension and protection solutions: we are a leading international player in pension risk transfer, life insurance in the UK and US, and in occupational pensions and retirement income in the UK. Through inclusive capitalism, we aim to build a better society by investing in long-term assets that benefit everyone.
* as of March 9, 2022
About Legal & General Retail
Effective January 1, 2022, Legal & General Retail Retirement and Legal & General Insurance (our two retail businesses) have been combined into a single division, Legal & General Retail, to enable us to better meet the needs of our retail customers.
Legal & General Retail helps protect the lives and futures of our customers; the division covers the savings, provident and retirement needs of our 12 million individual policyholders and employees. In 2021, we issued £957 million in annuity premiums and issued £848 million in lifetime mortgages and retirement interest only. Our Workplace pension platform served 4.4 million members, while in the UK we paid a total of £1,133.8 million in insurance claims.