Over the past 15 years or so, the subscription business model has seen explosive growth as evidenced by companies like Netflix, Amazon Prime and Spotify on the consumer service side and Salesforce, Adobe, Intuit and DocuSign on the B2B side. Zuora founder Tien Tzuo coined the phrase “the subscription economy” to describe the phenomenon.
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Subscription growth holds true for even high-ticket items like cars. The global vehicle subscription market reached $3.38 billion in 2022 and is expected grow exponentially to $173.47 billion by 2029, according to Fortune Business Insights. Europe currently dominates the global vehicle subscription market share with a little under one-third of the global market, followed by North America.
The Munich, Germany-based vehicle subscription company FINN is racing to expand its business in Europe and the US.
Founded in 2019 by Maximilian Wühr, Nikolai Schröder, Andreas (Wixler) Stryz, Max Beyer, Hans-Peter Ringer and Max-Josef Meier, FINN entered the US market in early 2022 with the goal of making a car subscription service easy and more affordable. Signup is done entirely online with one flat fee for the rental that covers everything, including insurance. The car is dropped off to customers anywhere in their service area. In the US, the company is currently operating in 11 Eastern states and Washington, D.C. This founder’s journey is based on my interview with FINN co-founder and CEO Maximilian “Maxi” Wühr who at age 28 was named to the 2023 Forbes Europe 30 under 30 list.
“I bought my first car in the US on the West Coast when I was studying there, and it was one of the worst customer experiences that I had. From beginning to end, I felt like I was taken advantage of and so it was just this huge hassle. And so when I thought about starting a company, I went back to what were the biggest pain points that I had and that probably many people also had and what I could do to relieve that hassle and pain,” says Wühr.
Wühr returned to Munich to help start FINN, whose stated mission is to make mobility fun and sustainable. Toward that goal, the company even offsets the entire CO2 emissions of their fleet based on the average vehicle consumption. For every kilogram of CO2 emitted, FINN pays a fixed amount to ClimatePartner, with the proceeds benefiting select climate protection projects.
Wühr, his co-founders and the 400-person team they’ve assembled are betting that their approach will differentiate them from competitors like Sixt+, Autonomy, Freshcar, Drive Flow and Enterprise and OEM subscription arms from Care by Volvo and Porsche Drive, plus a host of others. Each offers their variations of models, pricing and market availabilities.
The FINN approach seems to be working. “We grew from zero to €4 million of annualised revenue in the first year, four to €40 million in the second, 40 to €100 in the third, and now stand at roughly a €150 million revenue run rate. And at the core of this success is the idea that people struggle with the process of getting a new car and how can they can access individual mobility, and I think we have quite a compelling product to offer in that regard,” says Wühr.
How does the company manage with six co-founders? “We have quite a large amount of co-founders. They are all extremely talented, and they make my life a lot easier. And so ultimately, we have very, very clear responsibilities and therefore I can focus on the biggest objectives that I have. I have colleagues that I know and trust that are taking over a ton of responsibility, a ton of ownership. And that enables us to grow quite quickly,” says Wühr.
Wühr and his company’s backers are counting on that exponential growth continuing, as the car subscription business is capital intensive requiring an extensive fleet of vehicles available for on-demand subscriptions. So far, FINN has secured $720 million in debt and leasing facilities and $150 million in equity to support its fleet growth in the upcoming years.
Their latest funding was raised in July of 2023 for a Debt Financing round of €25 million by Avellinia Capital. Its €115 million B Round in May 2022 was led by Korelya Capital. Waterfall Asset Management led another Debt Financing round of $200 million in March of 2022, which came on the heels of a €500 million Debt placement in December of 2021 through Credit Suisse and Waterfall Asset Management. Additional investors include White Star Capital, HV Capital, Picus Capital and others.
Wühr grew up in a small village in Bavaria, Germany close to the Czech border. His father was a dentist and mother had a bookstore and, like the young Wühr, they were never satisfied with the status quo. “My father now is basically only working one day as a dentist, and he’s a professor at a university, but not as a dentist, but rather a general practitioner. He always tried out different stuff, and was also always very, very curious to learn. And I think that’s where I got my learning attitude from. And my mother in a similar way, but a lot more practical,” says Wühr.
He got his first taste of being an entrepreneur as a teenager building websites for local businesses. He would go on to graduate from Ludwig-Maximilians-Universität München with a degree in economics and continue his studies at Università Bocconi in Milan, Italy; the Center for Digital Technology and Management (CDTM) in Munich and later was a visiting scholar at the University of California Berkley in information technology.
After his studies, he thought he would enter the finance field, but wanted to find a place where he could have more responsibility and immediate impact. “I joined a couple of start-ups early on. And, and one of the most motivating things for me was to see how you can have huge impact at an extremely early stage. I actually jumped around quite a bit, did that a couple of times and in different challenges. And then ultimately, after four years of working in the Munich start-up ecosystem, thought that it was time to now found a company myself,” says Wühr.
As for the future? “We want to expand to California and Florida over the course of the next 12 months. And also looking at other states, for example, Georgia, the Carolinas or Texas for an expansion in late 2024. The other perspective that I have is, I want to make sure that we accelerate electric vehicle adoption. So, we currently have a 30% electric vehicle share in our fleet. And we want to make subscribing to an electric vehicle, the easiest choice that our customers ever faced,” concludes Wühr.