U.K.-based all-inclusive electric car subscription service Onto entered administration on 11 Sep., after failing to secure additional funding from investors.
Car Dealer magazine reports that the Warwick-based company has been adversely affected by a drop in prices of EVs during the first half of this year because its debt is secured against the value of its fleet.
Onto was set up in 2018 by Rob Jolly and Dannan O’Meachair. Cars are offered to customers on a monthly subscription basis. It had more than 7,000 EVs in its fleet by the start of 2023 and a total of around 20,000 customers over the last five years. In March 2022, Vauxhall announced a deal to provide Onto with 700 Corsa-e and Mokka-e EVs for its fleet.
Onto received Series C funding of $60 million from Legal & General (L&G) in 2022, which was to be used to launch in Germany this year. At the time, this took the company’s total funding to $330 million in equity and debt.
In January this year, Onto announced it had agreed a new credit funding line of £100 million ($107 million U.S.) from global investment group CDPQ and independent asset manager Pollen Street.
It is believed that L&G provided a further £22.5 million in funding earlier this year. In July, it was reported the company could face administration, after L&G said they would not provide any further funding to bail out the company.
In July, L&G described Onto as “an ambitious company with a talented management team that will play a vital role in accelerating the transition to electric vehicles”.
However, L&G’s reluctance to provide further funds led to restructuring company AlixPartners to make contingency plans for Onto’s administration.
The announcement yesterday confirms this has now happened. Gavin Maher and Jonathan Lees of Teneo Financial Advisory Ltd have been appointed as joint administrators of Onto Holdings Ltd.
In a statement issued on 11 Sep., Maher said: “Onto has suffered from the steep fall in electric vehicle residual value in the first half of 2023, rising interest rates and the squeeze on disposable income and was unable to secure additional funding from its shareholders.
“After entering administration, Onto will continue to serve existing customers as the administrators explore strategic options.”
AIM Group has contacted Onto regarding the impact of administration on its workforce and will update this article if we receive a response.
Other investors in Onto include Alfvén & Didrikson, Accelerated Digital Ventures, Cerebrum Tech Limited and the family office of Jim O’Neill.