This startup lets you subscribe to a Tesla like Netflix. Get an exclusive look at the pitch deck it used to raise $175 million.
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- In future, you may not own a car but instead subscribe to it as you do Netflix.
- Car-subscription startup, Onto, has raised $175 million in a Series B.
- We got hold of the pitch deck laying out its vision to end car ownership.
An electric vehicle subscription startup that allows drivers to subscribe to their cars like Netflix has raised $175 million in fresh capital.
The Series B round for UK-based Onto, which was founded in 2017, was led by Swedish Acast-backer Alfvén & Didrikson.
The startup allows customers to pay a fixed monthly fee for their car on a one-month commitment basis. The fee covers insurance, the cost of charging in a host of locations, as well as servicing, breakdown cover, and road tax.
Onto is one of several firms that are starting to offer vehicles on a subscription basis. Cazoo, an online car marketplace company due to list in New York in a $7 billion SPAC later this year, as well as Swedish automaker Volvo, both offer subscription services of their own.
Subscription car services have been tipped to grow considerably over the coming years. Some argue EVs are better suited to subscription models where the batteries of a car can be replaced, and it can return to the road.
To date, Onto’s service is limited to the UK but the company has set its sights on opening in overseas markets. The Series B round, which was a mix of equity and debt, brings the company’s total funding up to $245 million.
Existing investors Legal & General, who backed Onto through its Accelerated Digital Ventures platform, also joined the round. Turkish digital transformation firm Cerebrum Tech and Oatly and Deliveroo investor JamJar also backed the subscription startup. Pollen Street Capital also supported the round with a debt facility.
Rob Jolly, Onto chief executive, said that while most motorists want to switch to electric, many find the transition to be “expensive and daunting.”
“Our focus is on providing an easy, flexible and affordable alternative, and we’re seeing huge demand,” he said.
“This funding will allow us to further expand our operations in the UK and help more customers step into the world of EVs without being tied into long contracts or faced with large upfront costs.”
The company currently offers to deliver EVs to customers’ homes across the UK with motorists allowed to drive 1,000 miles a month.
In the case of a Volkswagen e-up! hatchback, motorists pay £339 a month with no upfront deposit. Onto claims this is around £50 cheaper per month than traditional leasing alternatives, which can demand a deposit of over £1,600.
The company also offers a range of other electric-based SUV and saloon cars. While Tesla’s are still unavailable to subscribe to, Onto said that the Model 3 will soon be available. The Tesla saloon will cost around £1,099 a month with the long range edition coming in at around £1,299 a month.