One of Britain’s biggest electric vehicle leasing groups has drafted in City advisers to find a buyer after one of its main backers refused to inject fresh funding.
Sky News has learnt that Onto is working with Deloitte on a sale or other form of financing in an attempt to place it on a sustainable financial footing.
Deloitte’s work has emerged just weeks after Legal & General (L&G) told Onto that it would not plough additional money into the business.
L&G committed £22.5m in May and June, on top of previous funding.
Rob Jolly, CEO and co-founder of Onto, said in a statement on Tuesday: “Onto has engaged Deloitte to consider strategic options for the group, including potential further recapitalisation, as we navigate the second half of 2023 and beyond.
“Having introduced over 22,000 people to electric cars, 90% of which had never driven one before, we know that the demand from both consumers and businesses is strong.
“We remain the pre-eminent market leader in electric car subscriptions, and the board is confident that our proposition can continue to play a key role in the UK’s net zero transition.”
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L&G also led a $60m funding round a year ago, saying at the time that Onto was “an ambitious company with a talented management team that will play a vital role in accelerating the transition to electric vehicles”.
Onto also has sizeable debt facilities in place with a number of lenders.
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The company is understood to have been hit by the dwindling value of electric cars, with its borrowings secured against its fleet.
Onto gives drivers access to cars made by the likes of Fiat, Peugeot and Vauxhall.
Announcing its investment last year, Wian Pieterse, a managing director at L&G, said: “At Legal & General we’re committed to playing our part in tackling the climate crisis and investing with purpose into companies that do good.
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“Onto is an exciting example of this; an ambitious company with a talented management team that will play a vital role in accelerating the transition to electric vehicles.
“We expect to see increasing demand for subscription models that not only pave the way towards a sustainable way of living but also meet the needs of those who don’t want to tie up valuable savings or incur a loan to buy a car.”
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Other investors cited in its Series C funding announcement included Accelerated Digital Ventures, Cerebrum Tech Limited, and the family office of Lord O’Neill, the former Treasury minister.
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In total, Onto has raised more than $350m to fund its growth.
Sky News reported last month that Onto was working with AlixPartners, the restructuring firm, on contingency planning if it could not secure the funding it requires.
