Thanks must go to the Development Bank of Wales for helping us make the transition smooth and successful. With their investment we can accelerate the development of the business, expand our product suite and remain a market leading name in vehicle subscriptions.
Since its launch in 2016, the growth of car subscription company Wagonex has been rapid. Over the past few years, Wagonex has collaborated with leaders in the automotive industry to provide bespoke subscription platforms for their customers.
For motorists looking for flexible car ownership, a Wagonex subscription includes maintenance, roadside assistance, road tax, and service fees. Car insurance can be added on too.
More recently, Wagonex has launched several high-profile white label platforms, such as Volkswagen’s CUPRA.
With this in mind, how did the journey to working with notable brands in the automotive industry come about?
The birth of Wagonex
Wagonex was born out of the frustration caused by the costly conundrum of either buying a car or being stuck in a long-term vehicle lease. Originally based in Shoreditch, founder Toby Kernon wanted to find an alternative to borrowing huge sums of money simply to buy a car that loses value the second it is driven away.
They felt that space was emerging for the easy-to-use and totally transparent ‘all-in-subscription model,’ with potential to become an important and valuable service.
Toby and the team discovered a range of flexible, inclusive subscriptions from established providers could be key to a new world for drivers, and Wagonex was formed – becoming the first independent UK business to focus on car subscription. However, the hard work had not even started.
After months of pitches and follow ups, Toby had the basis of the Wagonex platform – utilising integrated payments, affordable embedded insurance, and first-class customer service. The next step would be to secure investment to turn their concept into a reality. The aim was to be supported by significant industry players, enabling them to be well-placed to help develop this innovative area of the automotive industry.
Substantial equity funding
In September 2019, Wagonex Limited announced a significant equity funding round as it looked to bolster growth in the UK and beyond.
Wagonex were able to use part of the equity funding to complete their move to Cardiff, setting up in Tramshed Tech in December 2019. Toby and his team had been able to tap into the knowledge of the technology venture team at the Development Bank to identify the ideal tech HubSpot, before coming to a decision to relocate to the capital of Wales.
The Development Bank of Wales was able to lead the investment round, co-investing with US investors and UK-based business angels to invest £250,000, which helped fund their move to Wales.
As part of their growth strategy, Wagonex were able to hire three of the best employees in south Wales from companies such as GoCompare, with this was considered a crucial milestone for Wagonex.
“We are very proud to be based in Wales,” said Toby.
“Additional thanks must go to the Development Bank of Wales for helping us make the transition smooth and successful. With their investment we can accelerate the development of the business, expand our product suite and remain a market leading name in vehicle subscriptions.”
Wagonex had become a leading name in vehicle subscriptions, with the equity deal enabling them to work closely with several global vehicle manufacturers.
Following the move to Wales, the company continued to grow from strength to strength. In May 2021, Wagonex achieved two major milestones off the back of growing industry and consumer interest in its unique proposition. They surpassed 100,000 customer enquiries since its formation, before going on to exceed 10,000 registered users on its platform by the end of May 2021.
In May 2022, CUPRA and Volkswagen Financial Services UK (VWFS) launched a pilot Wagonex subscription for the UK arrival of the award-winning, all-electric CUPRA Born.
Richard Harrison, Managing Director at CUPRA UK, commented: “The future of mobility has never been more in the spotlight and our customers are increasingly looking for ‘on-demand’ vehicle ownership.
“This new subscription service reflects the shift in which an increasing number of our customers want to own and interact with our cars to meet their changing lifestyles.”
John Lewis, Head of Product Strategy and Development at Volkswagen Financial Services UK, said: “We are hugely excited to mark the launch of the CUPRA Born in the UK with a new subscription service.
“Our partnership with Wagonex underlines our commitment to putting the customer at the heart of everything we do as it will give customers more choice, flexibility and control.”
Toby added: “From the very beginning, Wagonex has been focused on the customer. This collaboration represents a real vote of confidence in the industry-leading technology we have built from the ground-up to streamline and simplify the subscription process for brands like Volkswagen Financial Services UK and CUPRA.”
Just four months later, in September 2022, Admiral Group’s venture building business Admiral Pioneer announced that Wagonex would be its first strategic investment.
This significant investment looks to support Wagonex as it continues to rapidly scale in the UK, having already delivered more than 120% of year-on-year growth as their consumer facing subscription offer gains popularity.
What does the future hold for Wagonex?
Wagonex has grown several times over since its inception, requiring an office move to Tec Marina in Penarth, and exciting plans to expand in North and South America, UAE, and across Europe on the horizon.
As Wagonex continues to move from strength to strength, the car subscription industry is widely considered to be the future of vehicle ownership.
With the cost of fuel hitting a record high in the UK this year, the average family car now costs over £100 to fill with fuel. As people feel the pinch in their wallets, Wagonex has seen a 340% increase in demand for electric vehicle (EV) subscriptions in July 2022.
While the platform covers a huge range of vehicles, motorists are primarily showing interest in smaller EVs such as the Renault Zoe, BMW i3, Tesla Model 3, Model Y, and the Audi Q4, with the subscription lasting approximately a year.
“Our subscribers are driving their favourite EVs without the long-term commitment. With fuel prices expected to continue to rise, we expect EV demand to outstrip ‘ICE’ vehicles by the end of 2022,” said Toby.