Renting a car is perhaps one of the least enjoyable experiences of a holiday. After jumping off the plane, fighting through customs and baggage reclaim, there is the then agonisingly slow wait in the rental office to pick up a car which inevitably isn’t the one you were expecting. Add in the pressured selling of various insurance products, unwanted upgrades, fuel topups, child seats and sat-nav, it can feel like a financial punch in the holiday budget.
The car rental market, dominated still by a small number of big players, is ripe for disruption.
Two years ago, in Paris, France, two entrepreneurs – Karim Kaddoura and Thibault Chassagne – set out to do exactly that. Virtuo, an app-based city centre car rental business, was launched and immediately challenged the way we rent a car.
Michael Altom, Virtuo’s General Manager for UK and Ireland explains: “If you were to create a car rental business today it would look very different to the model that currently exists.
“The first thing to go would be the lottery of what car you actually drive away in, followed by the paper and question-led approach that delves into insurance, mileage and fuel, and then the walk to a car park with a key in your pocket.”
There is a lot not to like about renting a car and with very few perks.
Virtuo offers something very different.
Drivers spend 15 minutes to register their information with a credit card, passport or identity card and driver’s licence via the Virtuo app. With the account validated, you are free to rent a car.
Cars are rented via the app, where you can choose between two models – an A Class or GLA Mercedes Benz. Basic insurance is included and there are premium insurance options available. Add the length of rental and a few hours before your rental begins a virtual key is available to download via the app.
The app will help you identify your car, with the virtual key unlocking and starting the vehicle ready for you to drive away. Every car includes satellite navigation, phone charging cables and reversing cameras.
Today, Virtuo operates across nine French cities and has launched its first operations across five locations in central London in July 2018. Through its exclusive partnership with Mercedes Benz, it offers premium cars for as little as £35 a day.
In France, its cars are available to rent at airports and from city centre locations. In London, cars can currently be rented from central railway stations including Kings Cross St Pancras, Waterloo and Victoria, and other busy locations for a quick city escape.
“Our value proposition is simple,” says Michael. “We help busy professionals living and working in our cities who may not own a car to escape from the city – whether for a day, the weekend or longer for a holiday or a business trip. That is why you find our cars located in central city locations. We also manage our own fleet of cars, ensuring they remain in the very best condition.”
It is an offer that is gaining a lot of interest and a dedicated customer base, with a 96% user satisfaction rate.
Virtuo’s growth plans are ambitious and based on a steady roll-out across other European cities, railway stations and, crucially, airports.
“Our cars are in centrally located car parks, and that means having to negotiate with car park operators individually,” says Michael. “Whilst that takes time, it also means that each and every location is well-researched with strong user demand.
“It is the same with our insurance partners and Mercedes Benz. When expanding into new countries we have to negotiate country by country. That will mean slower growth, but growth will be stronger and, importantly, sustainable.”
This is clearly demonstrated following its launch in London in July with its entire fleet rented out every weekend over the summer. Demand was, says Michael, much higher than we expected.
Whilst currently unavailable in UK airports, Gatwick and Heathrow are very much in Virtuo’s sights.
“Airports are a much harder nut to crack,” says Michael. “Negotiations with operators take longer and there are more barriers to entry. It is also a different rental market, driven by price. But we do aim to have cars available to rent at London airports as soon as we can.”
Growing a car rental business requires deep pockets. Cash is needed upfront to invest in vehicles, locations and with insurers.
“Virtuo was funded by angel investors in France in the first instance,” says Michael, “and raised a further £7.5m in 2017 via a Series A funding round. We are a data-driven business and invest considerable time and energy ensuring that we choose the right locations and that the cost of acquiring new customers is sustainable.”
The future for Virtuo is promising. It is winning loyal fans across France, Brussels and London, and the support of the media.
It plans to expand its offer across London and into other UK cities. Dublin is on its radar, and a little further ahead Virtuo may expand the choice of cars offered, potentially adding electric vehicles to its fleet.
“What won’t change is our dedication to making the customer experience as smooth and seamless as possible,” says Michael.
Kreston Reeves in London has played a key role in its move to the UK. Introduced by Silicon Valley Bank, partner Michael O’Brien has been quick to get under the skin of the business and to understand the challenges faced.
“Kreston Reeves has been a true partner to Virtuo.” says Michael. “Being able to quickly understand our business has meant that Michael and his team have been able to contribute to our business from day one.
“They helped us to set up in the UK with invaluable support and business advice on VAT, payroll and company pensions that ensured we met all the UK regulations. They are now our virtual finance team in the UK and provide us with ongoing support and advice as we grow our business.”
Virtuo featured as a ‘Business growth story’ in our ‘Going for Growth: UK company growth strategies to 2021’ report. To download your copy of the report, please click here.
"Kreston Reeves has been a true partner to Virtuo. Being able to quickly understand our business has meant that Michael and his team have been able to contribute to our business from day one."
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