Exclusive: Virtuo eyes expansion in Italy, UK and a green recovery from COVID-19
Virtuo, the French car-hire startup, which is mobile-only, had been growing rapidly in Europe before COVID-19 arrived. With the average European taking ten trips a year, from a long summer holiday to weekends away, the contactless service was positioning itself to be a high-end and high-convenience alternative to traditional car-hire.
High-quality, high-convenience car rental
The company’s pitch is simple: “We want to be the best option for long-distance mobility,” Michael Altom, Virtuo’s COO, explains. “For the A-to-B in a city, you have lots of options: bike, Über, tube, walk, but for longer distances, there is nothing better than the car.”
However, the costs of car ownership, both financial and environmental, are increasingly unattractive to younger generations. At the same time, traditional counter-based rental options lack the ease-of-use they expect.
“The main difference with Enterprise, Hertz and the other traditional rental options is the hassle-free nature of the service we provide,” Altom said. Michael joined Virtuo as General Manager for the UK, overseeing the launch of the new market. He then moved into a broader General Manager role, looking after the UK, France and Belgium before being appointed COO in 2020.
The mobile-only car service allows you to book and unlock pristine Mercedes A-Class or GLA all through your phone that are parked in convenient city-centre locations. The service uses technology to take all the pain-points out of traditional car rental, allowing you to use your phone to unlock the car, file a damage report, and track real-time fuel and mileage information.
Planning to expand in Italy
Founded by Karim Kaddoura and Thibault Chassagne in Paris in 2015, the French startup currently operates in France, Belgium, Spain, and the UK. Now, Virtuo is planning to launch its services in Milan, Italy around May 2021, as confirmed by Altom to UKTN.
The company also has dealt with several car manufacturers, offering high-end vehicles, to customers. For UK drivers — the service is in London and Manchester, with Edinburgh returning after a Covid-enforced pause.
Vehicles in other countries include BMW, Peugeot, Fiat, and Hyundai cars. Meanwhile, Virtuo is in talks with other marques to expand the range of their fleet.
Altom confirms, “Last year, we had around 350 cars in the UK and around 2000 in France. This year, we’re more than doubling the fleet in both countries.”
A big focus is on the environmental benefits for Virtuo. Altom acknowledges that while car sharing has a positive environmental impact, they are still using petrol vehicles. “We need to go further.”
Already, they are introducing Hyundai electric vehicles in France and working with manufacturers to identify the best model for use in the UK market. Ultimately, Virtuo is looking to redefine people’s relationship with cars.
“Our mission is helping cities and creating freedom from car ownership.” Altom says their goal is to provide a service that is preferable to car ownership. “That’s the option we want to give city dwellers — do not buy your car, do good for the environment and rent with us whenever you need it.”
Growth has been rapid, the service in Paris is experiencing annual three-fold growth. The service has proven popular, with Virtuo finding that over-coming the novelty factor for customers accustomed to the inconvenience of the traditional rental was one of their biggest challenges.
However, once used, there was a high customer retention level; 70% of their rentals are from returning customers, a trend they want to keep as they grow.
The challenges of Covid-19 and Brexit
COVID-19, however, has had an impact on their trade. Initially causing a downturn, Virtuo lent hundreds of unused cars to the NHS and health services across Europe. But then, there was a boom! As people turned to them for their domestic holidays. Virtuo managed 60% growth in the UK, and 10-15% growth even with their established French operations.
Brexit is also presenting a challenge for UK operations. Although not affected by the day-to-day difficulties of Brexit faced by importers and exporters, they were aware of the impact on their London-based staff and that it is now a less attractive destination for European workers.
But they remain confident the move into the UK market was right. “We’re betting a lot on London,” Altom said, “We see it as a really good market for us. Is Brexit going to change the face of London? It looks like London will stay strong and attractive.”
More extension in the UK?
As the wider economy recovers from COVID-19, Virtuo is looking to expand rapidly in the UK and Europe. As well as the launch in Italy they are planning to add Brighton, Bristol and Birmingham to their roster of UK cities with Virtuo services and expand their current UK fleet from 400 to 700 cars by summer 2021 as well as increasing their workforce, currently around 200, by 50% across Europe.
Virtuo launched in London in the summer of 2018, bringing its seamless mobile-only rental offering to UK drivers for the first time. It now has 11 locations at airports and train stations across the capital including Heathrow, Victoria, Waterloo, King’s Cross and Stratford International.
Further, Virtuo has raised £26 million in total from investors including Balderton Capital, Iris Capital and Raise Ventures and in 2021 they’re looking for more external funding.