'I have little sympathy for the lenders - where was the car finance value for consumers?'

Yahoo

5 days ago

Even as a child, if Aidan Rushby witnessed bullying at school the now entrepreneur's modus operandi was to come to the rescue.
Fast forward several years to where Rushby set up car finance app Carmoola to help consumers and get rid the "horrendous" commissions which could see millions owed compensation following the motor loan mis-selling scandal.
'There is something about serving and helping people,' says Rushby, co-founder and CEO of the fintech start-up. It's about delivering value for consumers so they can get a great product and ultimately you can drive a great business. I love seeing customers' reactions to the product.'
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Rushby knew he was on to something when his mother-in-law understood the concept of Carmoula when he pitched it to her, ahead of launching the company in late 2022.
Carmoola has since processed around four million loan applications in the three years since the app first came to market — and acquired total funding to the tune of £146m.
Before car financing came car washing when he set up his first business as a 15-year-old. He later set up his own motor racing team, made websites at university selling T-shirts before working in property and 'being out and about' in Bristol.
In 2013, Rushby started to think about digitising the rental experience and set up his first business venture, Movebubble, which lasted seven years. 'It was painful and I made so many mistakes,' he admits.
'I had a fair amount of childhood trauma and I was in this loop of failing. I was quite persistent and kept on trying to raise money to keep it going.
'It's not a great place as an entrepreneur to fear failure as you really need to embrace it. I wasn't scared of taking risks, I was more scared of how others would perceive it if it didn't work.'
Rushby, who has dyslexia, stepped away as CEO in 2021 and sensed an opportunity in the car finance market after mulling consumer business ideas in the mortgage and investment space.
He tested demand with a basic landing page website under a different brand name. Within a few hours, there were hundreds of sign ups for the product offering and it gave Rushby confidence to drive the business forwards.
'I saw that consumers were being ripped off by all these traditional lenders where they were paying the dealerships massive commissions and raking up the APRs,' he says. 'I thought there was a big opportunity to go direct to the consumer and deliver a modern fintech product experience.'
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There were still stumbling blocks ahead of launch as investors began to ask questions after regulatory approval took six months longer than expected.
Carmoola received the green light in the same week that Russia's invasion of Ukraine escalated. With two of Rushby's co-founders and engineers hailing from Ukraine, there was a frantic move to make the border crossing to Poland before it closed a few hours later.
Of Carmoola's 50 staff, half are engineers now based in Warsaw and the rest housed at the firm's Primrose Hill headquarters in London. A revenue run rate is closing in on £20m, with Carmoola growing at 150% year-on-year.
Its customer support team is employed directly and based in the UK, with Rushby noting that salaries are paid above market average in a bid to be pivotal, on-hand support to its customers.
'Consumers are trusting Carmoola with a very big purchase, probably the most important purchase after their home,' he says.
'It's an incredibly stressful time for those people who can't pay their car loan. They need professionals who can help them on that journey during periods if they lose their job or something happens in the family.'
Rushby is also eyeing the looming Supreme Court ruling which could see payouts for millions of drivers after dealerships increased commission without being disclosed to consumers.
The Financial Conduct Authority could then set up a redress scheme for lenders to compensate consumers, while payouts could take up from six months up to one year.
'It was one reason why Carmoola was created, to get rid of the horrendous commissions,' says Rushby.
'These people [lenders] were well aware of what they were doing in terms of ripping the consumer off. I have little sympathy. The traditional process was so opaque and they were acting for their own pockets. Where was the delivery of value to the consumer?'
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Carmoola's next port of call is to build out financial products centred around the vehicle by launching a leasing-style PCP product as well as car insurance. New markets' expansion outside of the UK will also be explored.
One senses that with the plentiful hurdles that Rushby has overcome during his career, both privately and in business, the entrepreneur relishes opportunities to solve them. Sure enough, as a founder he admits this to being 'super fun'.
'The more scary it is, the better sometimes,' he adds. 'It's a fun intellectual challenge of how to fix these things.'
View from the top: how to build a successful start-up
Go with your own gut
Don't look for other people to give you advice. You have to make the decisions and they come from listening to other people. Very few people have the context that you are trying to solve, so you have to form your own judgement and be disciplined as an entrepreneur.
Writing a journal is powerful
I write a CEO report outlining what we are doing at strategic and operational levels. It's a powerful tool to look back over time in how I was thinking at the time and whether it played out.
Show value proposition
To show real understanding, are you able to communicate that to somebody who has no idea? Do they get it and does it make sense to them? I pitched Carmoola to my mother-in-law and she got it straight away. I wouldn't say that is the golden rule but it is a useful way of articulating whether the business model makes sense.
A step by step process
This gave me a high level of confidence to make sure it would work after the lessons from my first business. What is the real size of the market? How is revenue generated and how many people are likely to use the product? How cost effective is it to acquire the customers in this space? Then it's how to generate revenue and what the unit economics look like for the product. I forecast all of that before we even started.
The real thinking
From here, it is whether you are confident in acquiring these customers, what the competition is going to do and if they can stop you; to how much time you have got to really make it fly and the key elements of what you need to deliver on so that they can't copy you.
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