Meet the First Foundry Cohort: Introducing Wagonex
Powered by FinTech Wales, the Foundry is a unique, not for profit accelerator programme designed to scale the next generation of digital ventures in Wales. This week, as part of a series of interviews chronicling the founders within the Foundry’s first cohort, we had the opportunity to speak with Toby Kernon, CEO & Founder of Wagonex.
Introduce us to Wagonex!
Wagonex is a technology business specialising in vehicle subscription.
We have developed, from the ground-up, market-leading tech that brings together all the elements (ID validation, credit checks, insurance etc) necessary to make subscription a streamlined and super-easy process for providers and consumers.
Not only are we a technology business, we also have our very own marketplace, where customers can subscribe to a range of vehicles directly.
What would you say is the biggest problem you are looking to solve?
The automotive industry isn’t perfect, and drivers can easily struggle to get over the barriers to entry that come with a car. If you lease a car, you’re expected to pay a huge deposit just to sit in the car, not forgetting the cost of maintenance, roadside assistance, road tax… You’re then stuck with that car for an average of 4-5 years, at the end of which you’re expected to pay even more as a balloon payment. And life changes a lot in five years – the bulky SUV which is perfect for the countryside won’t be much use navigating around London, and the nifty city car is going to struggle if you want to get two car seats in the back.
Subscription solves this problem by allowing subscribers to be flexible about their vehicles. You can subscribe from a month to three years at a time, and everything is wrapped up into one monthly payment – you know exactly what you need to pay, when you need to pay it. And when you’re ready you just trade your car in for a new one. It’s just that simple.
Crystal ball time! How do you think the automotive industry is going to look in 10 years from now?
Subscription is certainly going to change things up when it comes to the automotive industry. Back in 2018 Volvo were targeting 20% of all new vehicles going out on subscription by 2022, and 50% by 2025. We’re also seeing other manufacturers, leasing groups, and finance houses all looking eagerly at subscriptions and the benefits for not only themselves, but also their customers.
But it’s not only consumer vehicles which this applies to – we’ve seen a huge amount of interest in commercial vehicles as well, which makes sense. Especially when you’re looking at a surge in delivery demand and online shopping. Generally, our commercial subscribers are looking to reinforce their logistics, but actually end up extending their subscriptions with the knowledge they can swap them back in if they need to.
What makes Wales an attractive location to scale your business?
With Wales, it’s all about the talent. There are 16,000 people in Wales already employed in the FinTech sector, and 22,000 students studying subjects which translate well. This means that there is a huge amount of growth potential in Wales. Not only that, but there’s also a huge sense of community. Being part of the Foundry has really opened our eyes to the wealth of opportunities open to companies in Wales.
What has been the most challenging aspect of founding a startup?
There have been three main challenges for Wagonex over the last 5 years. Firstly, the elephant in the room is the Pandemic. This was a rough time for every single business up and down the country as we all had to rapidly adapt how and where we work. This was especially true of the automotive sector.
Whether you’re a start-up, a scale-up, a micro-business, or just have an idea for an amazing business, raising capital is always going to be difficult. We’ve been incredibly fortunate to have some outstanding investors who have supported our growth in Wales and enabled us to get involved with collaborations such as the Foundry.
Finally, just because your company is agile and quick to react, doesn’t necessarily mean that everyone else is. There is a great deal of patience needed with a start-up, as the big companies which you’re talking to can move slower than yours. The key is nurturing these relationships and persevering – often the longer the wait the greater the benefit.
What do you consider to be Wagonex’s biggest success to date?
Unfortunately, I can’t quite disclose our biggest success quite yet, but there’s some amazing news about to be released.
Our second biggest success has to be our infrastructure improvements which mean that we can scale the marketplace extremely rapidly.
We have two main products for the automotive space – basic access to our marketplace, and a full branded white-label offering. We can set up dealer groups in a matter of minutes and a dealer can be fielding subscription requests in the same afternoon that they reach out to us. As for the white label solutions, these do take a little bit longer, however our tech is extremely powerful and you’d be surprised how little time it takes to get things up and running.
What advice would you give to other founders?
Starting up a business from scratch is often likened to being on a roller coaster and I would agree with this metaphor. It’s therefore important to find a strong support network with which to share the highs and support you through the lows. Setting up on my own has meant that I could be incredibly adaptable and agile, especially in the early days, however if I was going to start over again, I would almost certainly look to find a co-founder who shared my vision, goals, and ambitions for the company.
Find Out More
You can find out more about Wagonex by following the links below to their website or socials: