- Pictured above are Onto’s co-founders Rob Jolly (left) and Dannan O’Meachair
ONTO, the electric only car subscription business, has fallen into administration.
At the beginning of the year the company secured a new credit funding line of £100 million from global investment group CDPQ and independent asset manager Pollen Street. However, uncertainty over EV residual values has led to solvency issues.
According to the business website Business Leader, Gavin Maher, joint administrator, said that the fall in RVs during H1 2023, rising interest rates and the squeeze on household incomes had been instrumental in the company’s downfall.
A statement from the administrators said:
On 11 September 2023 Jonathan Lees and Gavin Maher of Teneo Financial Advisory Limited were appointed as Joint Administrators of Onto Holdings Limited. On the same date, Gavin Maher and Ian Wormleighton were also appointed as Joint Administrators over Onto Tech 1 Limited, Onto Tech 2 Limited, Onto Tech 3 Limited and Onto Tech 4 Limited, each a subsidiary of Onto Holdings Limited (together "the Companies"). The affairs, business and property of the Companies are managed by the Joint Administrators. The Joint Administrators act as agents of the Companies and contract without personal liability. In performing their work in relation to these appointments, the Joint Administrators are bound by the Insolvency Code of Ethics.
Writing on LinkedIn in response to the news, Andrew Mortimer, UK executive chairman of mobility car subscription platform Loopit, reflected:
“This is sad news, but not reflective of the subscription market in general. Some companies were leveraging residual values for future profits, and when buying the market you are always weighing up growth trajectory and risk.
“EVs took a hit after Tesla started a price war/strategy, and therefore as long as you bought your cars through mixed channels competitively, and put them into market at sensible prices, you would have been insulated from this problem.
“I disagree with the correlation to consumer finances being squeezed, that ultimately drives more customers to subscription not fewer, but careful credit scoring and payment/debt management are needed at all times, and when scaling quickly, this is not always everyones first thought. Onto was a good company, and I am sure we will see the leadership team back again somewhere in the future.”
The administrators said that Onto would continue servicing existing customers.
Onto was founded in 2018 and had grown to become the largest electric car subscription service in Europe, with over 7,000 cars in the UK. In 2022, the business was recognised by Deloitte as the fourth fastest growing UK tech business in its Fast 50 list.
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Ralph Morton is the leading journalist in the leasing broker sector and editor of Broker News, the website which provides information and news for BVRLA-registered leasing brokers. He also writes extensively on the fleet and leasing market in both the UK and Europe.
