Wagonex: Toby Kernon
With just one monthly payment plus petrol costs, this car subscription service gives users the freedom to drive without the burden of actually owning a car
Name: Toby Kernon
Company Name: Wagonex
Date Launched: 01/06/17
Twitter handle: @wagonexchange
Tell us what your business does:
Wagonex is the UK's first car subscription service.
We provide a service which offers an alternative to car ownership with our membership service. Customers pay a monthly fee which means users just need to pay for petrol on top.
Customers are able to look through the list of Wagonex partners, log in to see more details and select their car through their membership package.
The vehicle is then dropped off or available for pick-up. We then aim to allow users to be able to switch their vehicle as part of their subscription plan.
Where did the idea for your business come from?
Wagonex was born from the idea that we no longer need to own a vehicle. It's a depreciating asset that costs more to maintain the older it gets, not to mention the fact many of us take on interested baring debt in order to get a car in the first place.
We felt that, as a customer facing industry, the customer always seems to take the brunt of the problem and that something needed to change.
The subscription model had transformed many other industries, and it struck us that the industry was also on the cusp of a shift in this direction too.
How did you know there was a market for it?
The mid to long term car ownership space is the largest part of the car market.
New car registrations hit 2.5 million last year of which one million where on PCP deals.
Within PCP the customer does not own the car, they simply pay a monthly price and are expected to bear the brunt of all the pain points, including depreciation, service, maintenance, MOT, TAX and the used car market.
We know we need cars but do not want to own them, and feel cars should become a service not a burden.
All our research and testing confirmed our thinking. Our investigation within the industry showed that manufacturers accept this is the direction the industry is taking and rely on young businesses like Wagonex to take the lead.
The market is huge and changing rapidly proving an exciting time for our business.
What were you doing before starting up?
Prior to developing Wagonex, I joined a sport-focussed technology business and became co-founder.
Having been inspired by the Brownlee brothers at the London 2012 Olympics I took up half iron distance triathlon and the role as COO was a perfect fit. The business sadly didn’t yield the exit value we hoped for, and shortly afterwards I was asked to join a funding platform as investment director.
I knew this wasn’t for me, and my desire to launch Wagonex became much stronger.
Have you always wanted to run your own business?
I have been self-employed or running businesses for 15 years. My father was always self-employed or ran his own business, so I guess it rubbed off on me.
How did you raise the money?
Our first round was through friends and family with a key strategic investor we were introduced to by chance.
We are currently raising funds in a similar fashion and have partnered with Syndicate Room a platform of professional and certified investors
Describe your business model and how you make money:
Our revenue model is commission on every transaction through the platform.
What challenges have you faced and how have you overcome them?
Raising money and courting investors requires constant attention. You have to eloquently outline your vision and cut out the noise.
Insurance for the cars has been interesting. The industry accepts that enormous change is afoot, yet they seem helpless in becoming nimble. In their defence they are trying, but the door is wide open to challenger brands within the space.
A well-capitalised insurance focused start-up would do very well. Our solution has been to speak with as many providers as possible and we have found what we are looking with a combination of companies.
What was your first big breakthrough?
Securing our first ‘White Label’ client WAVRent.com who manage 100 cars through the platform was strong validation and recognition for all the hard work we had put in.
What advice would you give to budding entrepreneurs?
A product is useless without customers. Measure everything and learn. You will always be raising money. Do whatever it takes to get things done and you will never have regrets
Where do you want to be in five years' time?
We want to be the go-to platform for cars on subscription across all brands, on a global basis.